04-26-2010 Council Minutes - Laserfiche WebLink

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MINUTES OF THE ORONO CITY COUNCIL MEETING Monday, April 26, 2010 7:00 o'clock p.m. CITY ENGINEER'S REPORT 8. 2011 STATE AID ROAD CIP DISCUSSION Kellogg noted this is a follow -up to the discussion held at the Council work session. Watertown Road is currently on the CIP for 2011 state aid funding. Two of the roadways on the CIP were questioned by public works and whether it would make sense to do Watertown Road first. Kellogg noted the City Council was encouraged to drive the roads following that work session and come to their own conclusions. Kellogg stated in the opinion of the public works department, it would be better to maintain Watertown Road over a long period of time rather than Old Crystal Bay Road or Willow Drive. Kellogg stated he wanted to make sure the Council had sufficient information and time to review this issue. Kellogg stated the obstacles the City would face would be with the financing if the other two projects are moved up and that the best way to fund a state aid project is to sell bonds. Kellogg stated the City would need to draft an agreement with Mn/DOT allowing them to use 98 percent, of the state aid allocation. • Kellogg stated the spreadsheet illustrates how the City is limited to 90 percent of the City's annual funding but pointed out that is based on the prior year's funding in 2009 and would be limited to 90 percent of that. The annual construction funding into the future does not get back to the full allotment until 2012. Once the City sells the bonds, it would be fixed at 90 percent of the previous year. is Loftus stated she is in agreement with the City Engineer and Don from Public Works that Old Crystal Bay Road is heavily used. Watertown Road appears to be able to be patched for a couple of years. Loftus indicated she would like to look at options for funding into the future. If the Council is not interested in improving Old Crystal Bay Road, they could move forward with Watertown Road. Funding would be an issue if the work on Old Crystal Bay Road is moved up. If the Council is not interested in doing the work this year, the Council should move forward with the Watertown overlay or another project because of the balance that can be carried forward. Kellogg stated the way the state aid system works is that once you reach five times your annual construction allotment or $1 million dollars, there is a penalty assessed against the balance. Kellogg noted the spreadsheet does not take into consideration the fact that you could save up all the dollars necessary to complete the project because it would take so long. Kellogg noted after certain levels are reached the penalties become more severe. Kellogg stated the City originally planned to do Old Crystal Bay Road in 2016 and that they anticipated the City would be five years short of having enough money in 2016. The plan at that point was to do the project in 2016 because the maximum the City would be allowed to borrow ahead would be five years, which would mean the City would not have to bond for it. Murphy asked if there is any overlay between this state aid and the state aid that was explained by Jim Grube in the rehab of County Road 12. Kellogg indicated those are two separate things and that this is municipal state aid. • Page 12 of 15