Agenda - Council Work Session - 03/19/2013

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The direction at this meeting was to: Tighten up the numbers so they are more realistic, make revisions to the communications plan by taking out the language about the costs being equivalent to a cup of coffee a day, and consider a franchise fee of $14 per month per household to create a source to fully fund the issue without assessments. This significantly changed the communication plan to more manage the message rather than an information gathering plan. On January 24, 2012, the City Council discussed the implementation of a program that would provide immediate benefit to the resident by funding 100% of the cost of seal coating and overlay improvements and continuing to assess 50% of any road way construction. There was much discussion about fully funding the program so as not to require any assessments, thereby gaining efficiency without going through an assessment process for every improvement. As mentioned early during the 300 resident survey, this would equate to $28 per month with the use of a franchise fee. In simple terms, we have approximately 178 miles of roadway in the City. Taking out 36 miles of MSA roads that have their own funding source, leaves 142 miles of local roads. The dollar amount that we were using per mile was $750,000 per mile. This was derived from the above mentioned Andrie Street bids that we received in 2009 without the sidewalk. At the time we were assuming 2 years of construction increases since this was a bid that was opened in 2009. More realistically, the economy has slowed and therefore, we have revised the projected cost per mile by adding a 10% contingency and no construction cost increase. The recommended cost per mile is $645,430. Early on in the discussion there was multiple conversations and comments about the use of whatever revenue source that is defined by this program to be used for street maintenance as well. There is approximately $495,000 that is allocated in the 2012 budget from TIF that is possible to continue until December 31, 2013, and in light of the discussions a few weeks ago about budget concerns in the 2013 gap year for the municipal center debt, Staff is recommending that the TIF financing continue to fund the street maintenance program until 2014. At that time, the franchise fee be used for the street maintenance program. Since Staff felt that the direction was to tighten up the numbers, we looked at the numbers from the overlay projects as well as the sealcoat projects. We used the sealcoat bids for the last three years and an actual bid per square yard of $5.85 for overlays. The average cost per mile for sealcoats is $29,406 per mile and $96,096 per mile for overlays. If we were to reconstruct the 142 miles of local roadways every 40 years we would need approximately $92M, or $2.3M annually. If you include sealcoating at years 5,12,24,31 at a price of $29,406/mile (4 times throughout the 40 year lifespan) and an overlay every 19 years (but only occurs once during the design life) at a price of $96,096/mile we would need another $417,565 and $341,141 respectively, for a total of approximately $3.06 M of required funding each year for both maintenance and reconstruction. Utilizing $14 per residential customer (split between 2 franchises, $7 each), the amount available for use in the reconstruction efforts in 2012 and 2013 would be $1.53 million annually. The only way to achieve a program that is fully funded is to require a 50% assessment for reconstruction. This does, however, take into account that there is no assessments for maintenance activities like sealcoats or overlays. Notification: N/A Observations /Alternatives: