Laserfiche WebLink
Metadata
Document management portal powered by Laserfiche WebLink 9 © 1998-2015 Laserfiche. All rights reserved.
Item 1 — Work Session <br />CITY OF ORONO MEMORANDUM <br />DATE: April 22, 2019 <br />TO: Orono City Council <br />FROM: Adam Edwards, P.E., Public Works Director / City Engineer <br />RE: Orono Road Planning and Funding <br />1. Purpose. The purpose of this work session item is to discuss and develop a plan to maintain the <br />City's roads in a planned responsible manner. <br />2. Background. For some time the City of Orono has struggled as to how to come up with annual funds <br />to maintain its road infrastructure. The one exception to this has been the City's designates Municipal <br />State Aid (MSA) Roads for which the City receives and annual allotment from the state. Several years of <br />the City not funding pavement maintenance has resulted in the disproportionally large number of roads in <br />disrepair requiring reactive maintenance and the inability for the Staff to plan for and execute a proactive <br />maintenance plan to protect and extend the life of these valuable assets. <br />a. Pavement Planning. In October 2014 the City adopted a Pavement Management Plan (PMP) <br />which does provide prioritization of road maintenance as well as a description of funding sources. The <br />PMP is used to inform the City's Capital Improvement Plan (CIP) which does provide priorities for <br />specific roads to receive maintenance or reconstruction out to 5 years and identifies a funding requirement <br />in general categories out to 20 years. Ideally the CIP would then inform the annual budget cycle. <br />b. Staffing and Action to Date. Since 2013 the Council and Staff have been working to develop a <br />viable funding source for Road maintenance. A summary table of actions is at Appendix A. <br />2. Road Funding. The city funds roadwork with two sources; the city's tax levy and Municipal State <br />Aid (MSA). MSA funding is only available for select roads, approximately 20% by center lane miles. <br />a. Pavement Management Fund (PMF). The City's only source of funding for the majority of our <br />residential roads is through the levy. The City does not currently assess or have a franchise fee for roads. <br />The estimated annual pavement maintenance and reconstruction requirements per the City's PMP is <br />$1,159,000/yr. As of 2019 the Pavement Management Fund (PMF) has $544,450 dedicated funding from <br />the levy and $120,000 from water tower telecommunications lease. At a total of $664,450 this represents <br />63% of the requirement leaving a funding deficit of $385,550/yr. To increase road funding without <br />impacting other city services will require a levy increase. The table below shows the impact on the Levy <br />to fund 75% of the pavement requirement and 100% of the pavement requirement. In past years the city <br />has also applied portion of any fund balance surpluses to the pavement fund. <br />% of Pavement <br />Additional <br />Levy <br />Tax Rate <br />Tax Impact on <br />Requirement funded <br />Annual Cost <br />Increase <br />Increase <br />$250K Home <br />$695K <br />$1M Home <br />on $2M <br />M <br />(%) <br />(Percentage <br />Points) <br />Home <br />Home <br />(Median) <br />75% (total PMF Levy <br />$ 750,000) <br />$ 205,550 <br />3.65 <br />0.571 <br />$ 13.44 <br />$ 42.47 <br />$ 64.24 <br />$ 135.61 <br />100% (total PMF Levy <br />$1,159,000) <br />1 $ 614,550 <br />1 10.91 <br />1 1.708 <br />$ 33.37 <br />$ 105.46 <br />1 $ 159.53 <br />1 $ 336.78 <br />The tax rate and tax impact calculations are based on an estimated increase in tax capacity of 4.75%. This <br />increase is based on the current property value estimates from Hennepin County. The increased taxable <br />values means the first $267,683 increase in taxes would not increase the tax rate. <br />