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REVISIT THE
<br />
<br />PRIORITY STREET LIGHTING FINANCING
<br /> By: Jessie Hart, Finance Officer
<br />
<br /> CASE #
<br />ISSUE
<br />
<br />Background:
<br />
<br />The issue of priority arterial street lighting was discussed at the Finance Committee meeting on June 28, 1994.
<br />During those discussions, several alternatives for financing the installation, operation and maintenance of the
<br />various levels were presented, and included utilization of franchise fees or the possibility of billing directly all
<br />residential properties in the City. Based on the discussions, the use of franchise fees was discarded and the
<br />Committee requested further information regarding the billing of such charges directly to thc benefiting
<br />properties, which are primari}y residential properties.
<br />
<br />I have contacted A~oka Electric Cooperative [AECI regarding the addition of this line item to the existing electric
<br />bill that residential~_properties currently receive. The one time charge of $5,625.00, quoted at the last meeting,
<br />would not be applicable in this case. That charge is specifically a one time charge for a new connection and
<br />would not effect ~e overall administration of this program. Based on this information, and assuming the
<br />addition of 4,000 ailditional accounts [over and above the approximately 900 accounts currently in the urban
<br />service area] the arinual billing cost would be approximately $4,800.00. This would be the cost regardless of
<br />whether the City prOceeds with the installation of one level, or all levels, of the priority arterial street lighting
<br />program.
<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 /> Total3
<br /> NUmber Of Cumulative. Installation Cumulative Annual2 Annual Cost
<br />Pfiorily Lights No.oV Lights Cost Install. COSt 0 & M Amort. 10 Yrs.
<br />
<br />Existing 25 25 01 01 2,250 2,250
<br />A 24 48 20,640 20,640 4,320 7,395
<br />B 22 71 18,920 38,560 6,390 12,284
<br />C 17 88 14,620 54,180 7,920 15,992
<br />D ~69 157 59,340 l 13,520 14,130 31,044
<br />
<br />1 Developer COntributed installation costs
<br />2590.00 per light annually
<br />3Capital cost h'nortized over 10 years at 8% interest plus O&M costs
<br />
<br />The following table dgtails 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 yew delay from the beginning of the installations to the point in time when the billings would
<br />begin. Included in th~total billable costs is an installation carrying cost amount that will be recovered over a three
<br />year period. At the cad 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 />
<br />]'oral Installation Total Annual
<br />
<br /> Annt~al Cost Annual Carrying. Billable Billing
<br />Priorily Am0¢l, 10 Yrs. Billing Cost Costs Costs Households Costs
<br />
<br />Existing 2,250 4,800 0 7,050 4,900 2.18
<br />A 7.,395 4,800 550 12,745 4,900 2.61
<br />B 12,284 4,800 1,028 18, ] 12 4,900 3.70
<br />C 15,992 4,800 1,445 22,237 4,900 4.54
<br />D 3 L044 4,800 3,027 '38,871 4,900 7.94
<br />
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