City Considers Franchise Fee For Douglas Drive Project
August 30, 2010
To continue addressing the suggestions identified in the Douglas Drive Corridor Study to improve driver and pedestrian safety as well as traffic efficiency, the City is partnering with Hennepin County to plan a 2016 reconstruction project that would add turn lanes, allow for shoulders and bike lanes, improve sidewalks, install street lights, and place existing above-ground utilities underground.
The project has an estimated cost of about $20 million, with Golden Valley responsible for roughly $9.5 million. Hennepin County will pay for about $10 million of the roadway work, design, and right-of-way acquisition. Preliminary project design has begun with aid from a federal grant awarded by Transit for Livable Communities (TLC). The $1 million-plus grant will provide money for preliminary engineering and some early acquisitions of right-of-way.
Golden Valley is considering to pay for its share of the cost with Xcel Energy franchise fees. For residents and small commercial properties with non-demand services, the monthly fee would be $2. The fee would be $22.50 for small commercial properties with demand services. Large commercial properties would pay a $206 monthly flat fee. The City Council will take public comment on the proposed franchise fee at its Aug 17 and Sept 21 meetings. If the Council votes to approve the fee, it will go in to effect in late 2010 or early 2011.
Because of levy limits on property taxes, funding this project through utility franchise fees is the most feasible payment option. If the Council does not approve the franchise fee, the City would need to secure another funding source to pay for its local share. Given the scope of the reconstruction, the costs cannot be financed through reserve funds. Council is considering adopting a franchise fee and dedicating the proceeds to capital projects.
This Xcel Energy franchise fee will not affect bills from CenterPoint Energy, Comcast, Qwest, or any other utility company. The costs of the reconstruction may fluctuate due to inflation and other variables over the years. The franchise fees will remain in effect until all costs can be repaid.
Some other cities using franchise fees to cover project costs include Brooklyn Center, Hopkins, Minneapolis, Minnetonka, Monticello, New Hope, Robbinsdale, and St Louis Park.
For more information about the Douglas Dr project or proposed franchise fees, call Public Works at 763-593-8030.