|
CASE # 3
<br />DISCUSS POTE/~/TIAL FUNDING SOURCE FOR PRIORITY ARTERIAL STREET LIGHTS
<br />- INS~TAL~ATION AND OPERATION AND MAINTENANCE COSTS
<br /> By: Jeslfie Hart, Finance Officer and Ryan Schroeder, City Administrator
<br />
<br />Background:
<br />
<br />The City of Ramsey Currently has in place a Street Lighting Policy that was established to provide a rational basis
<br />for the location, typeland method of financing of municipal street lighting within the City. The policy deals with
<br />two classifications o~street lighting, priority arterinl and subdivision street lights. This case will deal specifically
<br />with the policy as it Iclates to priority arterial street lights. A copy of the policy is attached for reference while
<br />th~s case is dmcussed',
<br />
<br />The Road and Bridg¢ Committee received information at the June 14, 1994 meeting, regarding the costs to be
<br />incurred if some or allof the priority arterial street lights were to be installed. These cost estimates were provided
<br />by Anoka Electric C6Pperative (AEC) and meet 'all of the specifications included in the policy. Following reveiw,
<br />the Road and Bridg~ Committee forwarded this information to the Finance Committee to review and discuss
<br />potential funding so~ces for the installation costs and the ongoing operation and maintenance costs of the various
<br />levels.
<br />
<br />There are currently 132 lights proposed for installation as priority arterial lights. The costs to install certain ievels
<br />or all levels of the pri[Ority arterial lights are detailed in the table below. The costs include the initial installation,
<br />annual operation and ~aintenance costs, and the capital recovery costs.
<br />
<br /> Total3
<br /> NUnlbcr Of Cumulative. lnstallation Cumulative Annual2 Annual Cost
<br />Priority ~ Ne.of Lights Cost Install. Cost O & M Amort. l0 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 ~.2 71 18,920 38,560 6,390 12,284
<br />C i 7 88 14,620 54,180 7,920 15,992
<br />D 69 157 59,340 113,520 14,130 31,044
<br />
<br /> 1 Developer contributed installation costs
<br /> 2590.00 per light annually
<br /> 3Capital cost ',frnortizcd over 10 years at 8% interest plus O&M costs 'r
<br />
<br />The City currently has in existence 25 priority arterial street Iights, for which the current operation and
<br />maintenance costs o~$2,250 are funded through the General Fund. Based on the above schedule, if all 132
<br />priority arterial street ~tights were installed, and the operation and maintenance costs were paid from the General
<br />Fund as the policy staies, there would be an increase in the Genera] Fund budget (from the current $2,250.00 per
<br />year) of approximatel}' $11,880.00 annually. If we include the capital recovery costs of $16,914.00, the increase
<br />to the General Fund b,Bdget would be $31,044.00 annually.
<br />
<br />The Genera] Fund cogld "borrow" monies from another fund, such as the Water Fund (WAC charges), to fund
<br />the installation of the priority arterial lights, however, it would be necessary to fund the loan repayment and the
<br />annual operating costs~of the additional street lights.
<br />
<br />The installation of th~p. riority arterial lights could be viewed as a primary benefit for residential properties, far
<br />more than for comme[cml properties, so to levy additional taxes to cover the additional operating costs would be
<br />unfair proportionatelyito the commercial properties in the City, who already pay substantially higher taxes, on a
<br />market value basis, th~ residential properties. Therefore, a funding source that does not impact the commercial
<br />properties should be sought.
<br />
<br />
<br />
|