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NORTHLAND By: Ryan R. SECURITY SIGN PROPOSAL Schroeder, City Administrator ~CASE # ~ Background: Northland Security Bank is located on the southeast quadrant of 142nd Avenue and T.H. #47. They are proposing to purchase a twelve foot pylon sign with a reader board as shown on the attachment. The sign itself will cost the bank $9,216. The reader board will cost $26,012. With electrical and miscellaneous items (brickwork and training for sign operation) the total project cost is projected to be $39,128. The bank has proposed cost sharing the reader board portion of the sign. In exchange for 25% of reader board time, the bank has requested a $15,000 contribution of the City. As part of the bank's consideration for the above, they would provide for all maintenance labor and materials, insurance, and input of message. (We would fax periodic, perhaps daily, changes in the scrolling message). The City's contribution is requested in two installments with the second payment due by the end of March, 1997. Contemplated is a fifteen year use agreement To date, the City has participated in two entry sign projects. The first was at Northfork where the City received one side of the two sided sign and Northfork has the other. We provide for the insurance and the initial landscaping. They provide the ongoing maintenance and electrical. When the sign needs to be refurbished, we will split the cost. Our initial cost was $3,000 for the $15,000 sign. We also have a sign at SuperAmerica at the T.H. #47/C.R. #116 intersection. SuperAmerica provided for the construction and donated the property and the ongoing maintenance and electrical. We paid the entire $6,750 cost and will be responsible for all maintenance and repair. SuperAmerica is not referenced on this sign. Early in the 1997 budget process, it was proposed to replace the existing Community Sign at City Hall with an electronic sign. The $30,000 to $35,000 projected cost kicked this project out of contention for funding early in the process. The current sign was donated by the Lions some time ago. The major disadvantage of the sign is that the letters must be changed manually using a ladder. We currently rent the use of this sign to community groups and others for $10/week/sign face. The average daily traffic volume by the City Hall sign is estimated at 5,500. At Northfork its about 30,000. At SuperAmerica its about 18,000. At the Northland Security Bank its about 14,000. As mentioned above, we currently have the ability to gain $1,040 in revenue from sale of space on the City Hall sign (although we never realize that due to our own use of the sign). At a 6% rate of return, that has a present value of $10,100 over 15 years. At 8%, this drops to $8,902. Compared to the T.H. #47 location, the traffic volume is about 3 times our current location but the use of the sign is at 25% of our current availability. The sign space will be about the same at two lines. The O & M, of course, does not exist for the T.H. #47 location. As noted above, we are to receive 25% of the sign time. Twenty-five percent of the cost of the reader board and related items is at about $7,500. The value of the data enu'y over the 15 year life could be as great as $5,000. I am unsure as to the value of the avoided O & M expense. Given all of that, it seems that the above has a certain value of $10,000 to $12,000. The proposal may have a greater value depending upon how one burdens the maintenance expense.