3A - Draft of Comprehensive Plan

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�. INFRASTRUCTURE POLICIES The following policies are proposed to guide all future infrastructure—related decisions in Pequot Lakes: Municipal utility systems must be fiscally managed like a private utility,minus the profit margin. Public utilities need to operate in the same manner as private utilities.They need to maintain the current system and level of service while financially planning ahead for repairs or replacement of system components.While the public is typically understanding of minor annual rate increases from private utilities(phone, cable,gas and electric),elected officials are often reluctant to consider rate increases, equating them with tax increases. Periodic rate adjustments that reflect the real cost of running and maintaining these systems are necessary.The City cannot allow maintenance liabilities to be unfunded and passed on to future residents and businesses. The long-term expense of infrastructure expansion,and the corresponding assumptions for induced growth and enhanced tax base,needs to be evaluated prior to every project that adds new infrastructure for taxpayers to maintain. Infrastructure projects in Pequot Lakes have historically been done on a "cash flow" basis,where the City evaluates the impact to the levy from paying its portion of a given project.When projects are funded with outside dollars(grants, low interest loans or direct private- sector investment in a project),the City has generally not calculated the long-term obligations of �. infrastructure maintenance, instead focusing on the potential near-term gains from increased property tax base.As our current infrastructure completes its initial life cycle, projected maintenance costs— which are typically a City obligation—are growing to unaffordable levels. Before additional obligation is added, it is critical that the City understand the entire cost it is committing to. Public sector investments need to be aligned with private sector investments,and vice-versa,to maximize the local return on investment.The City of Pequot Lakes has made its largest investments, and has its greatest commitments for infrastructure maintenance, in the traditional neighborhoods of downtown Pequot Lakes and the Business Park. Over the past two decades, private sector investments have tended to be outside of these areas,with residential construction happening on lakes and greenfield sites and commercial investments taking place along the TH 371 corridor.This mismatch in public/private investment wastes valuable public and private resources. When infrastructure systems are being maintained,the City must consider whether or not the infrastructure should be enhanced or scaled back based on the anticipated level of development that it serves.There are areas in the City, particularly in the downtown,where modest amounts of additional enhancement as part of a rehabilitation project would create a platform for additional private sector investment(eg.Taking savings from narrower travel lanes and using it for wider sidewalks). Conversely,there are areas where the level of service provided is not supported by—or often even desired by—the properties that are served (eg.Wider,faster roads through the rural countryside). When the City undertakes a major maintenance project,the land use potential for the area served `' needs to be the determinant factor in the form and scale of the improvement.