Minutes - Council Work Session - 08/27/2013

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Mayor Strommen stated the other issue is that the budget does not fund the Street Maintenance Program. Councilmember Riley stated he likes the fact that the capacity rate is decreased, supports the budget at that level ($7,482,513), and to find other funding source for the roads. He stated he would not support the Contracted Communication Services line item of $45,000. City Administrator Ulrich stated staffing cuts included reducing the Office Assistant that was programmed at 40 hours per week to 20 hours per week and hiring the Patrol Officer June 1 instead of January 1. He stated residents will receive a notice of the budget and a public hearing will be held in December to present the budget. At that point, the levy can be decreased but it cannot be increased over the levy established in September. Finance Director Lund explained it is not $156,000 to be cut, but $59,430 due to reduction in staff and consulting. Mayor Strommen stated she still thinks there is value in the Contracted Communication Services but would support additional discussion. She stated concern with delaying hiring of the Patrol Officer. Finance Director Lund stated it would add $27,500 to the budget if hired January 1. 2.03: Consideration of Long -Term Street Maintenance Program (SMP) Cost and Funding Options City Engineer Westby presented the Long -Term Street Maintenance Program (SMP), 2013 estimated costs, and funding options as detailed in the staff report. He noted the 2009 cost estimate was high because it was based on reconstruction in 40 years. Councilmember LeTourneau asked if these calculations put it at a 50- or 60 -year level. City Engineer Westby explained that instead of assuming a 40 -year reconstruction, staff used the Pavement Surface Evaluation and Rating (PASER) and based costs on the actual condition of the roadway. It assumes maintaining a 60 -year life span, which may not be feasible with some existing roadways because they have not been properly maintained. City Engineer Westby stated past funding methods included annual levying, purchase of general obligation bonds on a project -by- project basis, MSA allotments, and special assessments. He noted these funding methods have become less effective due to shrinking levies, costs for bonding, and you cannot assess a property more than the benefit of the project so if challenged, it can be difficult and costly to prove benefit. City Engineer Westby stated the City receives a $576,844 MSA construction allocation in addition to a $443,377 maintenance allocation. He explained the majority of the City's MSA fund allocations in the foreseeable future will be applied towards debt from previous projects. City Council Work Session / August 27, 2013 Page 3 of 6