Road Funding Options - PMP

City Council Adopts New Funding for Local Streets

After extensive discussion and numerous public meetings, on July 28, 2020 the City Council adopted ordinances that will provide funding for the City’s Pavement Management Program via a franchise fee on local gas and electric utilities for the use of public road rights-of-way. These fees are typically passed on to consumers on their monthly utility bill. These funds will be strictly dedicated to local street projects identified in the City’s Pavement Management Program.

Residential utility customers will see a charge of $7 on their electric bill (City of Anoka or Connexus Energy) and $7 on their gas bill (CenterPoint Energy) every month starting in October 2020. Commercial/Industrial properties will see a charge for each utility based on their largest meter size. Please see the road funding FAQ document for additional information on franchise fees.

City streets require continuous long-term care and maintenance. The older the street, the more the maintenance expense, and it is much cheaper to regularly repair a street than to reconstruct it later. The City has been working to implement a Pavement Management Program that would ensure that timely investments are made to protect our streets.

Consider the chart below that shows that spending $1 on streets newer than 15 years-old, can save $6-$14 on rehabilitation or reconstruction down the line. Unfortunately, it can be difficult to find the dollars for preventive maintenance that includes filling cracks and holes, and periodically overlaying streets with new asphalt in order to protect the underlying pavement. In addition, many older local streets were constructed with thinner pavement sections that cannot be effectively maintained and must instead be reconstruct to today’s standards to allow for future preventive maintenance.  A properly constructed and maintained street can last up to 60 years. 

Over the past several years, the City has sought to identify a stable sustainable funding source for the maintenance and repair of streets.  Over the past five years, the City has used a combination of General Fund tax revenue, bonding, and special assessments for street maintenance and improvements. The City Council is now having a community discussion of a monthly fee to fund the Pavement Management Program. This fee would be passed along to property owners via a franchise fee on electric and gas utilities. Franchise fees would be fully devoted to local street maintenance repair and reconstruction across the City.