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The Chanhassen City Council is asking for feedback from residents on a proposed franchise fee that would pay for the city’s pavement management program.

The proposed fee would add $10 a month to electric and gas bills — or $120 a year for residents. In 2018, the City Council researched the franchise fees as a way to fund the city’s street repair and maintenance program into the future.

Mayor Elise Ryan invited residents to address them and ask questions about the franchise fee proposal during its Aug. 26 council meeting.

Public Works Director Jason Wedel explained how the city evaluates and ranks street conditions. Each year, one-third of the city’s streets are ranked on a scale of 0 to 100. The city has 115 miles of public streets. Chanhassen’s streets are averaging at a score of 70, indicating fair condition. The average lifespan of a street is 50 years. In Chanhassen, the building boom came in the 1980s and 1990s, meaning that a major portion of those streets are due for mill and overlay maintenance.

Finance Director Greg Sticha referenced the work done by the previous City Council in how a franchise fee could provide the necessary funds. “We’ve been talking (about this) for two years,” Sticha said. “This council and previous council spent a lot of time researching this.”

Going forward, Sticha said the council made clear to him that benefiting homeowners are responsible for 40 percent of assessments, with the city responsible for 60 percent.

“The only dedicated revenue stream which the city has for funding of roads is currently is a levy of $380,000, for far below the city’s share,” Sticha said. “Any franchise fee or levy would only be issued for local road improvements; the council has been clear on that as well.”

Sticha said that issuing a franchise fee has the same impact as a property tax. “However a franchise fee allows the council more flexibility in who pays what and what customers are charged. On the other hand, issuing a property tax levy will result in residential properties picking up 83 percent of the tab, period, and that’s based on the city’s property tax, market value for residents across the city.”

Sticha said many of Chanhassen’s neighboring cities issue franchise fees, most used for local roads. While the franchise fee term is 20 years, any future City Council could modify it, just as it does with property taxes.

Craig Mertz, a 46-year resident, urged the council to look at the city engineer’s work as the best solution that is available to the city, and approve it.

Jay Schreur spoke on behalf of the three townhouse neighborhoods on Powers Boulevard. His constituents feel the franchise fee is for city-owned streets. They live in an association and already pay the association to maintain its streets.

“They consider it double taxation,” Schreur said. “They propose, either exempt us from it, or else maintain our association streets.” He added, “If you can’t make them exempt and it’s on their utility bills, they’d rather pay it annually.”

Ray Murray said his street’s poor condition isn’t due to residents but the vehicles dropping students off at the middle school. “The city put up no parking signs but people are still dropping kids off.”

Appreciation

The last to address the council was Lucas Sousa. Sousa described himself as someone raised outside of the United States and appreciated the city’s presentation on how it pays for and repairs public streets.

Earlier in the meeting, the city recognized teen volunteers in the parks and recreation summer program and a retiring firefighter.

“That’s so inspiring,” Sousa said. “That’s how you raise citizens, that’s how you know the community is going to work ... “ he said about the teens, adding, “The firefighters volunteer their time, they work hard. You just call 911 and they are there for you. Where I come from, it is not such a thing.”

He also expressed appreciation for such public services like the library. “There are places in this world people don’t have access to have a book,” Sousa said.

“I know that sometimes it’s hard for us to pay $5, $10 more,” Sousa said. “But for a public street that you drive on, or your neighbor drives or your coworker or your son-in-law, someone’s driving that road, if you think because that road is only my road, that’s being a little more narrow, a narrow vision of the well-being of the city.”

Next step

If the City Council decides to move ahead with the franchise fee, Sticha said the process will take a couple months to finalize, and to finish up the agreements with the utility companies, followed by a public hearing — the earliest date would be in October. At that time, or a following meeting, the council could approve the franchise fee ordinance.

City Manager Todd Gerhardt told the council that staff would post public comments and staff response on the city website. He encouraged residents to weigh in, either at www.ci.chanhassen.mn.us, or to contact city staff or city councilors.

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