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i <br /> CommumITY <br /> GiR® <br /> INSTITUTE <br /> Toll Free 866.900.3064 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 /> $1oo,000 of property tax revenue to the City throughout one life cycle,then the City <br /> has to come up with $9oo,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 /> WWW.COMMUNITYGROWTH.COM WWW.STRONGTOWNS.ORG <br />