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1 POLICIES 2 The following policies are proposed to guide all future infrastructure-related decisions in Pequot Lakes: 3 Municipal utility systems must be fiscally managed like a private utility, minus the profit margin. Public 4 utilities need to operate in the same manner as private utilities. They need to maintain the current system and 5 I level of service while financially planning ahead for repairs or replacement of system components.They also need 6 While the public is typically understanding of minor annual rate 7 increases from private utilities(phone,cable,gas and electric),elected officials are often reluctant to consider rate 8 increases, equating them with tax increases. h' Pe odic rate iTadjustments that reflect 9 :r, ;�;r. the real the-cost of running�A s� � ems ar necessary. 10 11 . The City cannot allow 12- , 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 14 and enhanced tax base, needs to be evaluated prior to every project that adds new infrastructure for 15 taxpayers to maintain. Infrastructure projects in Pequot Lakes have historically been done on a "cash flow" basis, 16 where the City evaluates the impact to the levy from paving its portion of a given project. When proiects are 17 funded with outside dollars(grants, low interest loans or direct private-sector investment in a project),the City has 18 generally not considered the long-term obligations of infrastructure maintenance, instead focusing on the 19 potential near-term gains from increased property tax base. As our current infrastructure completes its initial life 20 cycle, projected maintenance costs-which are typically a City obligation -are growing to unmanageable levels. 21 Before additional obligation is added,it is critical that the City understand the entire cost it is committing to. 22. Public sector investments need to be aligned with private sector investments, and vice-versa,to maximize the 23 local return on investment. The City of Pequot Lakes has made its largest investments, and has its greatest 24 commitments for infrastructure maintenance, in the traditional neighborhoods of downtown Pequot Lakes and the 25 Business Park. Over the past two decades, private sector investments have tended to be outside of these areas, 26 with residential construction happening on lakes and greenfield sites and commercial investments taking place 27 along the TH 371 highway corridor. This mismatch in public/private investment wastes valuable public and private 28 resources. 29 When infrastructure systems are being maintained,the City must consider whether or not the infrastructure 30 should be enhanced or scaled back based on the anticipated level of development that it serves. There are 31 areas in the City, particularly in the downtown, where modest amounts of additional enhancement as part of a 32 rehabilitation proiect would create a platform for additional private sector investment (eg. Taking savings from 33 narrower travel lanes and using it for wider sidewalks). Conversely, there are areas where the level of service 34 provided is not supported by-or often even desired by-the properties that are served (eg. Wider, faster roads 35 through the rural countryside).When the City undertakes a major maintenance project, the land use potential for 36 the area served needs to be the determinant factor in the form and scale of the improvement. 37 , and so their plaeement should be used to 38 implement this plan. When public utilities aFe avaWable and the east of these utilities is P-pt ;--hsidized by the 39 goveMment, rparkpt fartnrr, ;A411 r-a--,;p He elepment density te iRerease I ltilifip,; ;hp, ld enly be extended inte 40 these ;NheFe high develepment density is desiFed. F9F aFeas that ame W FP-MaiA FUFal (these beyond the '1 . DRAFT-November 2010 411 P a g e