Agenda - Public Works Committee - 07/16/2019

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5.01: Review Plan to Spend Unencumbered Pavement Management Program Funds City Engineer Westby stated that during the May Public Works Committee meeting, staff was unexpended pavement management program funds, why these funds were not spent earlier and the plan for spending the funds. The current balance of the unencumbered funds is approximately $901,000. This includes $872,500 from 2013 budgeted pavement management project funds that went unspent ($1,327,500 was budgeted and only $455,000 was spent) and $28,500 from five years of bond premiums and interest earnings. City Engineer Westby stated that staff chose not to expend the funds earlier because street reconstruction bonds cannot be used to fund improvements that did not previously exist. For example, if curb and getter or sidewalk did not exist before a street was reconstructed but was to be constructed as part of a street reconstruction project, street reconstruction bonds could not fund such improvements. In addition, when the City widens or strengthens (thicker pavement section) a street, the extra costs for widening or strengthening cannot come from street reconstruction bonds. The City therefore used some of the excess funds to cover such -term pavement management plan and - City Engineer Westby stated that staff plans to expend the unencumbered funds using approximately $698,000 to cover City Improvement Project #19-01, Ford Brook Estates Street Reconstructions, and #19-03, Wood Pond Hills & Chestnut Ridge Street Reconstructions. In addition, since the City is currently considering the implementation of franchise fees, including potential rebates of these fees to offset special assessments on properties previously assessed for street reconstruction and overlay improvements, staff did not want to add another year of debt to the tax levy if the franchise fee were to be implemented. This will leave a balance of roughly $203,000 that could be used to fund franchise fee rebates if franchise fees are implemented or could be used to fund a portion of the 2020 street reconstruction or overlay improvement projects. He stated that staff plans to bring a plan forward to the Council in July for a 2020 pavement management plan. Chairperson Kuzma stated that the City would set itself up for some difficulty if Variolite is improved without assessments. He acknowledged that if the assessments are too high, the residents would most likely object to the project. City Engineer Westby stated that the other projects within the current 10-year CIP are proposed to be completed with assessments and have a large number of properties that would be assessed. He explained that in order to do one of those roads, staff would need to propose another five-year plan. He stated that Variolite has the smallest number of residents that would be assessed. Chairperson Kuzma stated that if the franchise fee method is not chosen, the City would most likely have to go back to bonding. Public Works Committee / June 18, 2019 Page 2 of 7