Agenda - Public Works Committee - 02/15/2005

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are rougi~ly $100,000 Ngher tkan this average. The reason for this variation in annual expenses associated with this pro,am is due primarily to the fact that new street construction was extremely high during the six year period between 1978 and 198.3 when nearly 40% of our current street inventory was paved. This grouping of streets has been requiring the more expensive bituminous overlay maintenance over the past several years. It can be observed that future annual costs will be decreasing as the needs of these older streets are be satisfied. However, over the last several years a number of measures had been undertaken to provide for this needed funding including the len~hening of sealcoating intervals and the deferral of some overlays. In addition, funding, from all desig'nated MSA streets have been pro~ammed for MSA funding even when such streets have similar numbers of benefited properties as neighboring non MSA streets. The projected six year program continues to employ these same techniques, however, the streets projected for overlays in 2006 and 2007 do not appear to be capable of being deferred to a later year. If it is desired to cap the annual program at $300,000 it would be possible to defer some of the 2007 seatcoats to 2008. However, the 2006 program does not allow for this flexibility since the program.contains few sealcoats which are not financed by developer escrows or MSA funding. Discussion: One alternative toward achieving a budget amount equal to the current allocation would be to increase the annual City allocation to this program in 2006 by $60,000 and defer some of the 2007 sealcoats until 2008. Another alternative might be to investigate the use of a portion of the overhead costs to increase the size of the program. Currently 17% of the actual project construction costs are added to determine the total project cost which are assessed. These overhead costs are as follows: engineering and inspection 10%; administration 5%; and bonding and legal 2%. In addition, 5% for contingencies are included in the costs identified by the feasibility study, but these are only assessed if the actual project cost exceeds the feasibility estimate. For the 2006 program I7% of the assessed half of the project would be approximately $6t,000 which would be roughly equal to the deficit for that year. tt must be emphasized that the City does incur actual out of pocket expenses associated with this program. These include publication costs, postage and payments to Anoka County to administer the assessments. Recommendation: Based upon discussion Reviewed By: Public Works Director/Fire Chef Assistant Public Works D~rector/Principal Engineer Street Maintenance Supervisor Finance Officer PW: 02/15/05