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MINUTES OF THE ORONO CITY COUNCIL MEETING Monday, August 23, 2010 7:00 o’clock p.m. _____________________________________________________________________________________ Page 16 of 18 7. STREET CIP Olson noted there were some questions raised about whether work on Willow Drive should be moved up to 2013. Staff has had discussions with the public works department and they have come up with some numbers regarding ongoing maintenance. The costs associated with maintaining Willow Drive until it is reconstructed is estimated to increase to $31,050 from $28,200, for a total of $59,250. Another advantage to moving the project up to 2013 is the current low interest rate environment. When Willow Drive is reconstructed, it will require an additional bond sale to fund the project. Selling the bonds now will insure that the City can take advantage of the low interest rates. A recent sale of local municipal bonds with a maturity of 15 years came in at 3 percent. One option is to sell bonds for Old Crystal Bay Road so the levy will not be affected. Orono Orchard Road will require approximately $1.4 million worth of bonds depending on the Metropolitan Council’s participation. As part of the Casco Point Road project, there was approximately $1.6 million of water and sewer work that should come out of the water and sewer fund, which will help pay for the bonds issued for Casco Point. Olson stated those two projects should have a minimal impact on the levy based on timing and the low interest rate obtained. Staff is currently working with Ehlers and Associates to update the City’s Pavement Management Plan. This plan must be updated prior to any bond sale. Olson noted the plan needs to be adopted unanimously. Staff would like to know what year the City Council would like to schedule Willow for improvement. McMillan stated she appreciates the research done on this and the minimal impact it will have on the tax levy. Given the current state of the economy, the proposed 2010 bond scenarios, the City is looking at a fairly significant jump. McMillan indicated she is hesitant to issue more bonds and that she would like to know exactly what the City’s property tax revenues are going to be. Franchot stated given the low interest rates and the fact that the road needs to be rebuilt in the upcoming years, he would like to go forward with Willow. Kellogg noted Willow Drive is a state aid route and the debt service would be paid by state aid. Olson noted the City would not have enough in state aid funds to pay for the entire project since Old Crystal Bay Road would take a large portion of the state aid funds. Loftus asked if Council Member McMillan is comfortable with leaving Willow Drive for 2016. McMillan indicated she is. Olson stated they can leave it in and remove it later or remove it now. Franchot asked what the likelihood is that the project would come in lower than expected. Kellogg state the cost of construction currently is low and that he is not able to say what it will be like three years from now. Item #02 - CC Agenda - 09/13/2010 Approval of Council Minutes 08/23/2010 [Page 16 of 18]