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COMPREHENSIVE PLAN - INFRASTRUCTURE DISCUSSION August 2010 BACKGROUND In an age of tight budgets and increasing austerity, it may be prudent for the City to fundamentally rethink how it provides services we have all come to expect. Suggesting a different approach is not necessarily a rejection of the status quo but an acknowledgment that what brought us success in the past may not automatically serve us well in the future. As part of our Economic Development discussions, we have evaluated the cost and benefits of further industrial park development using the current, infrastructure-intensive model. We learned that if all tax revenue generated from the industrial park was applied to the cost of the project, it would take three decades for the project to break even (excluding phase-in costs,which extend that timeframe). In other words, expanding the industrial park using the same infrastructure-intensive model as part of a plan to "expand the tax base" is not a sound strategy from an overall tax revenue perspective. We also note some of the prime commercial areas in town where we are having difficulty keeping up with infrastructure maintenance. Government Drive, the city street with the greatest collection of valuable commercial properties, has been a maintenance priority for nearly a decade. The needed improvements have not happened because the City lacks the funds to complete them. The City Council has recently received a petition from property owners along North Sleutter Road requesting that the road be improved and turned over to the public. This request gives us a unique chance to do an in-depth analysis on the costs associated with the City's development pattern using current numbers and projections. It reveals the long-term tradeoffs associated with our current model, tradeoffs that are now being realized throughout the entire system. NORTH SLEUTTER ROAD The residents along North Sleutter Road have petitioned the City Council to have the road improved and then maintained by the City. As per City policy, the initial cost of the improvements would be paid 100% by the benefitting property owners. There would be no general fund expenditures spent to bring the road up to "city standards".The road is then turned over to the public to maintain over the long term using general fund money'. ' State Statutes allow a municipality to directly assess property owners for the cost of improvements up to the amount the property increases in value due to the improvement. It is generally held that simply maintaining a paved road — turning rough pavement filled with cracks and potholes into smooth pavement — does not substantially improve property values, if at all. This is even truer for underground infrastructure where maintenance does not even add an aesthetic improvement. While some cities will assess for part of the cost of a maintenance project,the amount is usually kept low enough so that challenging in court is not worthwhile. Legally, this is a questionable practice. Page 1 1