Agenda - Council Work Session - 01/18/2011

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CC Work Session Date: 01/18/2011 By: Tim Himmer Engineering/Public Works Information Title: Discuss street reconstruction policy and consider public informational campaign Background: Item #: 2. 1. The concept of developing an assessment policy for street reconstruction has been talked about numerous times over the past couple of years. The discussions really escalated with the advancement of the Andrie Street/164th Lane Municipal State Aid (MSA) improvement project in 2009. The only existing City street assessment policy pertains specifically to the Street Maintenance Program (SMP); where overlays are assessed at a rate of 50% and sealcoats are being phased out through the year 2014, from a previous rate of 50% to the current rate of 22% in 2011. A majority of the discussion related to this matter to date has leaned towards the use of additional revenues, and to get away from one time assessments. Doing so would most likely require the levying of additional taxes or the establishment of fees, but it could also eliminate or greatly reduce the amount of projects that are counter -petitioned due to cost factors (assessments) to the residents. Conversely, it could also result in a large amount of petitions requesting improvements. Advancement of this policy will establish a more concrete funding mechanism, and allow for more consistent resident interaction on future street improvement projects. Utilizing the general fund alone to offset these costs led to a few concerns and topics of discussion: . Tax exempt parcels would receive benefit without any contribution. . The City would not be able to issue improvement bonds unless a minimum of 20% of the project is assessed, thereby eliminating a potential funding source. . How would levy limits affect this process? . The loss of $300,000 per year in TIF money (in 2013) that is currently being used to offset the general fund contribution. At a work session meeting in November of 2009 staff was directed to review what it would cost to continue with our standard street maintenance activities, and add reconstruction costs into the program in five year increments. Staff completed this analysis and then evaluated how much funding would be needed over the next ten years; since approximately 45% of the roadways in the City were constructed between 1975 and 1985 (a 40 year design life was assumed). This information was presented to the Council in work session on June 15, 2010. See attached information on the 5 year breakdown and a history of road construction in the City. This analysis was done based upon an ideal maintenance schedule, and it is not realistic to assume that we would be able to generate the dollars necessary to fund such a program. Initially this matter was strictly dealing with a reconstruction policy, but we could not lose sight of the fact that we need to actively maintain our roadways (sealcoat and overlay) so they can reach this 40 year intended design life. The sealcoating assessment is being phased out over the next few years, and we continue to fall behind on maintenance activities due to funding constraints; we always seem to have more roads to maintain than available funding. We ultimately perform maintenance activities based upon available funding and the road rating performed by public works, with some improvements being extended into subsequent years. There are situations, however, that we must forego necessary repairs due to the counter -petition process, which eventually leads to increased costs in future years as the roadway may deteriorate faster. Therefore we needed to take a broader look at the overall longevity of our system to include both maintenance and reconstruction. Observations: