Minnesota’s Municipal Transportation System Governor’s Transportation Advisory Committee September 14, 2012 Anne Finn, LMC Transportation Lobbyist

About the League of MN Cities  The League serves 832 of Minnesota’s 853 cities through advocacy, education and training, policy development, risk management, and other services  The League also operates an insurance trust for cities

About Minnesota’s 853 Cities  352 cities have a population < 500  500 cities have a population < 1,000  139 are in the seven-county metropolitan area  Of the 714 cities in greater MN, only 36 have a population > 10,000

Bottom line: Minnesota’s cities are diverse

Planes, Trains (and Buses) and Automobiles (a.k.a. Airports, Transit and Streets)

Planes, Trains (and Buses) and Automobiles  Airports

Planes, Trains (and Buses) and Automobiles  Airports  135 publicly owned airports in MN  Metropolitan area has MSP + 6 reliever airports  Remainder are in greater MN  In greater MN, airports are typically owned by a city

Planes, Trains (and Buses) and Automobiles  Airport Funding  State Airports Fund (SAF) is the primary state funding source for aeronautics  SAF comes from dedicated taxes on aviation fuel, aircraft registration, and airline flight property  Money in the fund is appropriated biennially to MnDOT as part of the transportation budget

Planes, Trains (and Buses) and Automobiles  Airport Funding Challenges  In 2003, legislature transferred $15 million from the State Airports Fund to the general fund  Amount was repaid in 2008, then taken again in 2009  Funds have not been transferred back, meaning some airport maintenance delays

Planes, Trains (and Buses) and Automobiles  Transit

Planes, Trains (and Buses) and Automobiles  Transit  Cities largely rely on counties, MnDOT, regional organizations and nonprofits to provide transit  Dozens (hundreds?) of cooperative arrangements exist

Planes, Trains (and Buses) and Automobiles  Transit  Growing in importance statewide due to demographic changes, economic challenges and environmental awareness  Key component of local economic development initiatives

Planes, Trains (and Buses) and Automobiles  Transit Funding Challenges  The level of service that Minnesota transit systems can provide is closely tied to the amount of funding provided by the state  Funds are not keeping up

Planes, Trains (and Buses) and Automobiles  City Streets

Planes, Trains (and Buses) and Automobiles  City Streets  37, 524 of Minnesota’s 292, 599 lane miles (about 13%) are municipal streets  Made up of collectors and residential streets  The design and quality of city streets is significant to all users

Planes, Trains (and Buses) and Automobiles  City Street Funding  Municipal State Aid (MSA) funds up to 20% of streets in cities over 5,000 population  Currently, 147 (of 853) cities receive MSA  Non-MSA city streets are funded with property taxes and special assessments  Less common: assistance from county, developer fees

Planes, Trains (and Buses) and Automobiles  City Street Funding Challenges  Most cities are ineligible for MSA  In MSA cities, MSA funds are often exhausted by cost participation in state/county projects  Already tremendous pressure on property taxes  Special assessments unpopular; increasing difficulty with benefit test

Planes, Trains (and Buses) and Automobiles  City Street Funding Challenges (cont.)  City budgets are strained  Maintenance is affordable, but not always a priority  Tax exempt property does not pay

Municipal Street System is Aging

New Funding Tools Needed  Unlikely  Eligibility for MSA by more cities, more streets  More revenues from state  Special assessments suddenly becoming popular

Street Improvement Districts

How would it work?  Authority needed  Cities would have ability to establish one or more districts  Projects would be identified when district is established  Fees would be collected within district to fund projects in the plan

What is a street improvement district?  Would allow cities to collect fees for:  Maintenance  Construction  Reconstruction  Fixed transit infrastructure  Trails and pathways

Benefits  Enabling legislation only  Modeled after existing authority  Mechanism is fair  Allows maintenance and reconstruction to stay on schedule  Allows property owners to pay relatively small fees over time

More Information Anne Finn