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CASE
<br />
<br />REVISIT THE PRIORITY STREET LIGHTING FINANCING ISSUE
<br />By: Jessie Hart, Finance Officer and Steve Jankowski, City Engineer
<br />
<br />Background:
<br />
<br />The issue of priority arterial street lighting was discussed at the Finance Committee meeting on June 28, 1994,
<br />and again on July 26, 1994. In addition to revisiting the option of billing residential properties, it was requested
<br />to review past Ramsey Resident Newsletters to see if an article/survey had been published regarding street lights
<br />and the resident's interest in them.
<br />
<br />It was found that the Council held a public hearing on July 24, 1990, to receive citizen comments regarding the
<br />issue of street lights in new and existing areas. Generally, the citizen comments received were in favor of street
<br />lights being installed at major intersections and possibly at regular intervals throughout urban neighborhoods.
<br />Staff was directed to prepare a Street Lighting Policy, which was adopted in 1992, that outlined the difference
<br />between priority and subdivision street lights and established a priority list. At that point, the process stagnated
<br />with no identifiable funding source. Since that point in time, there have been numerous priority street light
<br />installations, most with the cost of installation borne by the developer and operation and maintenance costs paid
<br />out of the General Fund.
<br />
<br />Recently we have received a request to install a priority street light at the intersection of 167th Avenue N.W. and
<br />C.S.A.H. #5 which is listed as a level A priority. Presently, the City's Future Street Lighting Fund has a balance
<br />of $11,928 which could be used to finance the installation of 13 of the 24 priority A lights. Various funding
<br />sources have been discussed with direct billings to residential properties being the preferred method, since the
<br />majority of the priority lights benefit primarily residential properties.
<br />
<br />As a refresher, the costs to install certain levels, or all levels, of the priority street lights are detailed in the table
<br />below. The costs include the initial installation, annual operation and maintenance costs, and the capital recovery
<br />COSTS.
<br />
<br /> Number Cmnulative
<br />Priority Of No.of Installation Cumulative Annual2
<br /> Lights Lights Cost Install. Cost O & M
<br />
<br /> Total3 Total4
<br />Annual Cost Annual Cost
<br />Amort. 10 Yrs. Amort. 20 Yrs.
<br />
<br />Existing 28 28 01 01 2,520 2,520 2,520
<br />A 23 51 19,780 19,780 4,590 7,537 6,606
<br />B 21 72 18,060 37,840 6,480 12,118 10,336
<br />C 17 89 14,620 52,460 8,010 15,827 13,355
<br />D 68 157 58,480 110,940 14,130 30,660 25,435
<br />
<br />1 Developer contributed installation costs of $18,625
<br />2590.00 per light annually
<br />3Capital cost amortized over 10 years at 8% interest plus O&M costs
<br />4Capital cost amortized over 20 years at 8% interest plus O&M costs
<br />
<br />The following tables detail the cost per residential property if the City were to bill at the various levels, assuming
<br />that the installation would all be completed prior to the beginning of any billing process. It is anticipated that
<br />there will be a one year delay from the beginning of the installations to the point in time when the billings would
<br />begin. Included in the total billable costs is an installation carrying cost amount that will be recovered over a three
<br />year period. At the end of the three years, the rate will be reviewed and adjusted accordingly. It is anticipated
<br />that increases in operation and maintenance costs would offset any decrease due to the carrying costs being
<br />recovered.
<br />
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