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s <br /> > ,pr.‘lo <br /> Lo()"(‘ fre( sc,:ii C0mmuNiacY e <br /> GROWTH <br /> INSTITUTE <br /> Toll Free 866.900.3064 i Fax 866.924.1928 <br /> MEMORANDUM <br /> Date: December 15,2011 <br /> To: Mayor and City Council <br /> Cc: Planning Commission <br /> Re: Comprehensive Plan/Community Assets <br /> At the last City Council meeting,Councilor Ryan made the remark that the City's <br /> roads and streets are a"community asset"that everyone can use and enjoy.While <br /> this is true in a very narrow sense,it overlooks the obvious long-term community <br /> liability this infrastructure eventually becomes. <br /> When a developer builds a new street and then turns it over to the City to maintain, <br /> the City is not getting a"free road"as has been stated in the past.What is happening <br /> is that the public is taking on an asset that has attached to it a long term obligation <br /> for maintenance.We have a destructive habit of looking only at the asset side of that <br /> transaction. <br /> Who is to pay for maintaining all of these"assets"?The answer is that it will be the <br /> property owners of Pequot Lakes that pay the bill or the roads and streets will not be <br /> maintained.And while there is a general belief that improving roads and streets <br /> generates wealth and adds to the overall prosperity, it does not automatically <br /> translate into tax revenue for the City. <br /> If the federal government,state government or a developer comes in,builds a street <br /> for the public and then turns it over to the City to be maintained,we have one life <br /> cycle that is essentially free.At the end of that life cycle,we have to come up with <br /> the money to maintain the street. If it costs$1 million to maintain but only generates <br /> $100,000 of property tax revenue to the City throughout one life cycle,then the City <br /> has to come up with$900,000 from somewhere else to cover that cost. <br /> If you agree with the updated Comprehensive Plan that a key economic development <br /> strategy is to"reduce the tax burden"(page 24),you need to answer the question: <br /> Where will the money needed to maintain the City's infrastructure come from? <br /> Tn7TAnA7 r'nMMTn.T7TVr:Dr1WTL4 remit WARW.STROM:TOWNS.ORO <br />