06-22-2015 Council Work Session Packet

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MEMORANDUM TO: CITY COUNCIL FROM: ADAM T. EDWARDS, PE SUBJECT: STREET FUNDING DISCUSSION DATE: JUNE 22, 2014 ______________________________________________________________________________ References: City of Orono Pavement Management Plan, adopted October 27, 2014. City of Orono 2015 Capital Investment Plan (CIP) City of Orono 2015 Budget 1. Issue. Currently the City’s street rebuilding and maintenance requirements exceed funding. 2. Background. For some time the City of Orono has struggled as to how to come up with annual funds to maintain its road/street infrastructure. The 2015 Budget does include $65,800 for pavement maintenance which is sufficient for potholing, signs and winter maintenance. For 2015 City provided $69,700 for contracted street maintenance of which $53,403 was designated for Seal Coating the Casco Point Streets. The Pavement Management Fund (PMF) has $0 and there is $1.27M available through the MSA Funds. The amounts budgeted and available are considerably less that the averages of $540,000 for maintenance and $947,000 for reconstruction budgeted for in our surrounding communities. More importantly the recourses available are significantly below the amount required to properly maintain the city’s streets. In the past, the City has funded street reconstruction projects through the sale of bonds and has applied leftover general fund amounts towards street maintenance projects. This has resulted in the disproportionally large number of streets in disrepair requiring significant and the inability for the Staff to plan for and execute a maintenance plan to protect and extend the life of these valuable assets. a. Pavement Planning. In October 2014 the City adopted a Pavement Management Plan (PMP) which does provide prioritization of road maintenance as well as a description of funding sources. The PMP is used to inform the City’s Capital Improvement Plan (CIP) which does provide specific priorities specific roads to receive maintenance or reconstruction out to 5 years and identifies a funding requirement in general categories out to 20 years. The 2015-29 (CIP) adopted on December 8, 2014, plans for annual expenditures for street seal coating of $254,000 and annual expenditures for mill & overlay and reconstruction of ~$1,400,000 beginning in 2015. b. Staffing and Action to Date. In the Fall of 2013, the City Council directed Staff to develop options for funding annual street reconstruction and maintenance. In response, the City Engineer conducted a study to include querying surrounding communities about how they provide funding for annual street maintenance and reconstruction. In March of 2014, he presented options to the City Council. Council requested staff to analyze funding options against several scenarios. The scenarios were then presented at the May 27, 2014 working session. The Council directed Staff to bring back more information on franchise fees and to present an option for road maintenance in the 2015 General Fund Budget. In August 2014, council directed staff to add $30K to the roads maintenance budget for 2015. On October 27, 2014 the council adopted the PMP. At the April 27, 2015 Work Session the Council directed me to provide a by year maintenance and reconstruction plan for the next five years. At the May 26, 2015 Work Session the Council directed staff to provide the Levy impacts for 2016.