Agenda - Council Work Session - 05/15/2007

Home

CITY COUNCIL WORK SESSION Topic Report: Assessment Policy By: Steven Jankowski, City Engineer I~ - Background: A desire has been expressed to review the funding alternatives for the City Street Maintenance program which addresses the preventative street maintenance needs on an annual basis. An analysis has been prepared for the next five years of the program which anticipates that 30 miles of streets will need to be overlaid and another 95 miles sealcoated within the 2008 through 2012 programs. On an annual basis this equates to six miles of overlays and 19 miles of sealcoats. Attached is a sheet summarizing the funding requirements for the next five programs based upon the unit prices anticipated for the 2007 program ($6.63 per square yard for Overlays and $1.35 per square yard for sea1coats). Also included on this sheet are three scenarios for funding the program. Historically the sources available for funding the program include; the general fund, special assessments, Municipal Sate Aid (MSA) funds, and developer escrows for the first sea1coating. Each of the three scenarios proposes fully utilizing the MSA funds to cover the cost of the maintenance work on MSA designated streets. MSA funds are projected to require $1,032,463 over the next five years which represent $206,500 annual or about 25% of the city's current total MSA annual allocation. Each scenario also anticipates fully utilizing the developer escrows toward the cost of the first sea1coating. The first funding scenario show that a continuation of the city's current policy of assessing 50% of the project costs for both sealcoating and bituminous overlays would require an average annual contribution of $433,558 from the city's general fund. This would increase to $623,769 if the assessments were to be' eliminated for seal coating and to $867,116 if the assessments were to be eliminated on both sealcoating and overlays. Currently the City allocates $400,000 annually from the general fund for this program. Other than increasing annual program funding to the levels shown above, another consideration could be to defer some projects into future years to reduce revenue requirements. This would not be recommended for projects scheduled for overlays, since deterioration tends to accelerate when pavements reach this stage of their life and may result in even more costly street reconstruction being ultimately required. While staff is not recommending deferrals for sea1coating projects, an analysis was prepared to determine what some level of deferral would have on needed funding levels. If half of the scheduled sealcoats were to be deferred until after the 2012 program the impact on the city's annual funding levels would be reduced by approximately $95,000 per year. This savings would be only about half the amount of revenue needed to offset the lost revenue