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performed in years 20 and 40. And in approximately year 60, either a reclaim and repave project or a full
<br />reconstruction would occur, after which the maintenance cycle would start all over again.
<br />Based on staff's recommended pavement maintenance project schedule above, the estimated costs to regularly
<br />maintain all city streets over the next 5, 10 and 60 year periods are as follows:
<br />• 5-year (2014 — 2018) = $11,011,879 which equates to an annual estimated cost of $2,202,376
<br />• 10-year (2014 — 2023) = $25,247,367 which equates to an annual estimated cost of $2,524,737
<br />• 60-year (2014 — 2073) = $262,077,338 which equates to an annual estimated cost of $4,367,956
<br />The 2014 budget includes $500,000 for street maintenance projects. Based on the 5 year estimated costs above, a
<br />shortfall of about $1,700,000 is projected for years 2014 through 2018. Assuming the City budgets $500,000 over
<br />each of the remaining 4 years, a 5 year street maintenance program could then be funded if an additional $1,700,000
<br />could be funded through another source.
<br />It is important to note that the estimated costs above assume each of the identified pavement maintenance projects
<br />will be completed on all streets in the designated year, including a reconstruction around year 60. However, if the
<br />PASER rating for a certain street shows that the pavement does not need an overlay or reconstruction at the
<br />regularly scheduled time, that project will be delayed until needed based on the PASER rating, thereby reducing
<br />overall program costs. In addition, reconstruction of certain streets may also occur due to the need to replace or
<br />repair municipal utilities, but this is not accounted for in the estimated costs above. Lastly, if instead of a
<br />reconstruction project a reclaim and repave project can be completed on a street, this would also reduce overall
<br />program costs.
<br />Long -Term Street Maintenance Program Funding Options
<br />Traditional funding sources for street maintenance projects have included special assessments (for sealcoat and
<br />overlay projects), annual MSA allotments, GO bonds, and general levy budgeting. However, these traditional
<br />funding sources are becoming less and less reliable as funding sources for such projects. This is primarily due to
<br />shrinking budgets resulting in fewer dollars being available for street maintenance projects, as well as due to more
<br />frequent public petitions opposing such projects, thereby delaying projects and increasing costs.
<br />Special Assessments - In the past, special assessments have been levied against abutting property owners on sealcoat
<br />and overlay projects. Residential assessment amounts have varied from hundreds of dollars to over $7,000. In the
<br />future, assessment costs would increase substantially as the city begins to add street reconstruction projects to our
<br />maintenance program. If the current assessment policy continued to be followed, which allows for assessments of
<br />50% of the total project costs on overlay projects, assessments on reconstruction projects would easily exceed
<br />$10,000. This amount, which may not be defensible if challenged, would likely present a financial hardship for
<br />many property owners, even if assessed over a 10 year term. Rental rates would likely be affected too as rental
<br />property owners would likely raise their rates to cover their assessments.
<br />Municipal State Aid account - In 2013, our MSA allocation for street maintenance on MSA routes was $443,377
<br />and our construction/reconstruction allocation was $576,844. However, a majority of our MSA fund allocations will
<br />continue to be applied towards debt repayment of previous projects through 2022, and most of the remaining MSA
<br />funds are targeted for other CIP projects. Therefore, MSA funds will not be a viable funding source for many years
<br />to come.
<br />General Obligation Bonds — GO bonding has been and will remain a viable option for funding street maintenance
<br />projects. However, using GO bonds to fund projects increases project costs slightly due to the added financing costs.
<br />General Levy Budgeting — Using the general levy to fund street maintenance projects introduces risks due to the
<br />uncertainty that the adopted budget will include the necessary funds to cover the needed long-term street
<br />maintenance program projects each and every year.
<br />The ideal funding source for a long-term street maintenance program would be reliable, providing a fixed amount
<br />year after year to fund the program as needed. It would also be a dedicated fund, preventing portions of it from being
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