Agenda - Council - 01/28/1997 - Laserfiche WebLink

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I I I I I I I I I I I I I I I I I CASE # DISCUSSION REGARDING STREET MAINTENANCE PROGRAM FUNDING By: Ryan R. Schroeder Background: At three separate meetings toward the end of 1996, the Counc/1 considered introduction of a utility franchise fee ordinance, the revenue from which was proposed to be dedicated to the sealcoating portion of the street maintenance program. Ultimately, this ordinance was not introduced by the Council. At the January 14, 1997 meeting, Council directed that tasks be undertaken to provide for the 1997 Street Maintenance Program. The 1997 program is budgeted at $293,700, of which $135,000 is expected to be covered by the Public Improvement Revolving Fund. This fund receives revenues from tax increment interest earnings, interest earnings fi-om the fund itself, and repayments of special assessments. Absent any changes in policy or revenue availability, the fund is expected to remain solvent for several years. However, retirement of tax increment districts will eventually remove a revenue source from the fund. The City has a paved street inventory reported to be 130.62 miles as of the end of 1996. An additional 6.82 miles are unpaved. For 1997, the City will seal 14.3 miles and overlay an additional 3.55 miles of pavement. Additionally, the budget contemplates a contribution of $20,000 in 1997, from the general fund to assist in paving some of the remaining dirt streets. Over the past five years the sealcoating program has averaged about 13 miles each year with another 2 miles .per year overlaid. The average annual cost has been about $200,000, although recent increases ~n annual cost are expected to continue According to the City Engineer, 43.61 miles of street pavement may be in need of an overlay with another 43.75 miles in need of sealcoating (minus the 1997 program). Through 1991, any sealcoating or overlays were provided by an assessment of 100% of project costs to the benefitted properties. Since that time, the City has generally assessed 50% of project costs, with the balance provided through either a general tax levy or most recently through the PIR fund contribution. An exception to that rule is created when the street in question has received a developer contribution toward the initial sealcoating. (Standard practice in ail recent subdivisions is intended to cover 100% of project cost; on occasion the contribution is short, creating the need for a small assessment.) Another exception has been created when an overlay is required after an earlier sealcoating has been petitioned against, stopping the sealcoating project which later necessitated the resulting overlay. In this case, the overlay is assessed at I00%. We have not recently surveyed metro area cities on street maintenance practices but it is generally the case that cities most often provide for sealcoating as a city maintenance expense (without a resulting assessment). Provision of overlays varies fairly significantly throughout the metro area, given specific circumstances and project costs. This Council has had a brief discussion on potential cost savings of avoidance of some or all of the notice requirements of the benefit assessment program. Alternatively, however, if the assessment program was eliminated, we would still need to provide notice to the public in some manner alerting them that oil and rock was about to be placed on their street. The primary area of savings would be in staff time in preparation of the assessment rolls, in preparation for the hearings, in response to questions from citizens during the day, and in site visits for the same purpose. Savings in those areas could easily be in the $10,000 to $20,000 range for each program. For 1997, we are proceeding under the program which has been established during the past few