HomeMy WebLinkAbout04-22-2019 Council Work Session PacketOrono City Council
Work Session
Monday, April 22, 2019
Council Chambers 5:00 p.m.
AGENDA
1. Orono Planning and Road Funding
Annual:
• Budget: Part of June, All of July, August and October.
• City Administrator & Police Chief Update (3 times per year for 15 minutes)
Previous Work Session Topics
March 19. 2019
• Policy Discussion
February 25, 2019
• Park Commission Applicant Interviews:
• Planning Commission Applicant Interviews:
• LMCD Update — Mark Kroll
January 28, 2019
• 2019 Mission, Vision & Strategic Values
Item 1 — Work Session
CITY OF ORONO MEMORANDUM
DATE: April 22, 2019
TO: Orono City Council
FROM: Adam Edwards, P.E., Public Works Director / City Engineer
RE: Orono Road Planning and Funding
1. Purpose. The purpose of this work session item is to discuss and develop a plan to maintain the
City's roads in a planned responsible manner.
2. Background. For some time the City of Orono has struggled as to how to come up with annual funds
to maintain its road infrastructure. The one exception to this has been the City's designates Municipal
State Aid (MSA) Roads for which the City receives and annual allotment from the state. Several years of
the City not funding pavement maintenance has resulted in the disproportionally large number of roads in
disrepair requiring reactive maintenance and the inability for the Staff to plan for and execute a proactive
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 priorities for
specific roads to receive maintenance or reconstruction out to 5 years and identifies a funding requirement
in general categories out to 20 years. Ideally the CIP would then inform the annual budget cycle.
b. Staffing and Action to Date. Since 2013 the Council and Staff have been working to develop a
viable funding source for Road maintenance. A summary table of actions is at Appendix A.
2. Road Funding. The city funds roadwork with two sources; the city's tax levy and Municipal State
Aid (MSA). MSA funding is only available for select roads, approximately 20% by center lane miles.
a. Pavement Management Fund (PMF). The City's only source of funding for the majority of our
residential roads is through the levy. The City does not currently assess or have a franchise fee for roads.
The estimated annual pavement maintenance and reconstruction requirements per the City's PMP is
$1,159,000/yr. As of 2019 the Pavement Management Fund (PMF) has $544,450 dedicated funding from
the levy and $120,000 from water tower telecommunications lease. At a total of $664,450 this represents
63% of the requirement leaving a funding deficit of $385,550/yr. To increase road funding without
impacting other city services will require a levy increase. The table below shows the impact on the Levy
to fund 75% of the pavement requirement and 100% of the pavement requirement. In past years the city
has also applied portion of any fund balance surpluses to the pavement fund.
% of Pavement
Additional
Levy
Tax Rate
Tax Impact on
Requirement funded
Annual Cost
Increase
Increase
$250K Home
$695K
$1M Home
on $2M
M
(%)
(Percentage
Points)
Home
Home
(Median)
75% (total PMF Levy
$ 750,000)
$ 205,550
3.65
0.571
$ 13.44
$ 42.47
$ 64.24
$ 135.61
100% (total PMF Levy
$1,159,000)
1 $ 614,550
1 10.91
1 1.708
$ 33.37
$ 105.46
1 $ 159.53
1 $ 336.78
The tax rate and tax impact calculations are based on an estimated increase in tax capacity of 4.75%. This
increase is based on the current property value estimates from Hennepin County. The increased taxable
values means the first $267,683 increase in taxes would not increase the tax rate.
b. Municipal State Aid (MSA). The city receives approximately $412,000 / yr from the state MSA
fund. The city is paying an annual debt service of $140,000/yr on some street maintenance bonds from the
MSA fund. The debt service is scheduled to be paid off in 2026. In 2018 the city took a five year advance in
order to reconstruct Old Crystal Bay Road. The fund is projected to have a positive balance again in 2024.
Until 2024 any maintenance activities on MSA roads will have to be funded with the PMF.
3. Road Budgeting for 2020-2024. The table below depicts potential sequencing of road reconstruction
and overlay projects. This plan assumes an increase in the levy to $750K in 2020 and 1,050,000 in
2021; a continued dedication of the Water tower lease revenue through at least 2022; and that there are
$200K of funding from positive revenue balances thru 2021. These are planning level estimates.
Detailed estimates will be prepared prior to council approval of the projects. The amounts for the
Ferndale Road N represent repayments to Plymouth for the proposed mill and overlay project scheduled
for this fall. The amounts for Towline represents some contracted patching for this for 2020 with a shared
project with Medina and Independence in 3-4 years.
PAVEMENT MANAGEMENT
2020
2021
2022
2023
2024 2025 -
Balance from previous year
$
$ 7,633
$ (49,633)
$ 59,800 $
130,200 $ 129,600
Levy
$ 750,000
$ 1,159,000
$ 1,182,000
$ 1,206,000 $
1,230,000
Water Tower Lease
$ 120,000
$ 120,000
$ 120,000
Other Funding
$ 200,000
$ 200,000
Starting Year Balance
$ 1,070,000
$ 1,486,633
$ 1,252,367
$ 1,265,800 $
1,099,800
Preventive Mainteance
$ 200,000
$ 200,000
$ 200,000
$ 250,000 $
250,000
Street Name
Pavement
Ratiln U (0 i
Recommended
Action LJ
Lyman Avenue
20.5
Reclaim
$ 85,100
Livingston Avenue - Blaine to Shadywood
22.0
Reclaim
$ 174,900
Windjammer Lane
28.3
Reclaim
$ 70,400
Townline Road (Shared with Independence)
38.9
Reclaim
$ 30,000
$ 196,200
Casco Circle
41.1
Nill & Overlay
$ 156,300
Smith Avenue
43.8
Mil & Overlay
$ 85,400
Rest Point Lane
51.0
Mil & Overlay
$ 37,100
Dickenson Street
51.5
Mil & Overlay
$ 74,100
Navarre Avenue
52.4
Nall & Overlay
$ 59,800
Park Lane
55.0
PAll & Overlay
$ 38,000
Lafayette Ridge Court
57.3
Reconstruct
$ 68,500
Fox Street - Orono Orchard to East End
58.8
Pave
$ 77,800
Fox Street- Brown -Orono Orchard
58.8
Reconstruct
$ 1,040,200
Togo Road
59.3
Mil & Overlay
$ 94,900
Ferndale Road North Shared with Plymouth
60
PAII & Overlay
$ 68,467
$ 68,467
$ 68,467
Orchard Park Road
60.7
Mil & Overlay
$ 184,400
Glendale Drive
62.2
will & Overlay
$ 43,700
Kenwood Way
65.6
Mll & Overlay
$ 29,600
Navarre Lane
67.0
Mil & Overlay
$ 94,600
Olive Avenue
69.0
will & Overlay
$ 39,100
North Arm Drive
71
Mil & Overlay
$ 365,300
Bayview Place
72
Mil & Overlay
$ 82,300
Kelley Parkway - OCB Rd to StoneBay
72.3
Mil & Overlay
$ 88,600
Briar Street
73
Ivill & Overlay
$ 56,500
Livingston Avenue - CR15 to Blaine
73
Mil & Overlay
$ 150,600
Willow Drive - Fox St- Brown Road
73
Ivill & Overlay
$ 293,300
Forest Lake Drive
74
Mil & Overlay
$ 75,900
Eileen Street
74
Mil & Overlay
$ 26,600
Spates Avenue
76
Mil & Overlay
$ 52,400
Crestview Avenue
76
Evill & Overlay
$ 59,200
Old Long Lake Road
76
Mil & Overlay
$
385,200
Orono Lane
76
Mil & Overlay
$ 48,100
Heritage Lane
77
Mil & Overlay
$ 127,300
Lakeview Terrace
77
PAll & Overlay
$ 120,200
Chippewa Lane
77
Mil & Overlay
Dahl Road
77
Mil & Overlay
$ 53,200
Brown Road North
77.0
Ivill & Overlay
$
335,000
Elm Street
77.6
fv511 &Overlay
$ 37,700
Arbor Street
77
N511 &Overlay
$ 79,700
Prospect Avenue
1 77 1
Mil & Overlay
1
$ 35,500
4. Requested action. Staff Requests council discussion and direction on the following:
a. Roads to develop plans for 2020. Staff's proposal is to execute those listed in table 3. This
information will be used to develop and design and engineering proposal for Council approval.
b. Road Funding. At what level does the council plan to fund the pavement management fund?
This information will be used to inform future discussions and decisions during this year's Budget, CIP
and Levy process.
Appendix A
Summary of Staff and Council Actions related to Road Funding.
Fall of
The City Council directed Staff to develop options for funding annual street
2013
reconstruction and maintenance. Staff conducted a study to include querying surrounding
communities about how they provide funding for annual street maintenance and
reconstruction.
March
Staff presented funding options to the City Council. Council requested staff to analyze
2014
funding options against several scenarios.
May 2014
Scenarios (Assessments, Franchise fees, Bonding, Levy Increases) were presented. 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.
August
Council directed staff to add $30K to the roads maintenance budget for 2015
2014
October
Council adopted the Pavement Management Plan (PMP)
2014
April
Council reviewed the funding options for road maintenance/reconstruction with the
2015
consensus being against Assessments or Franchise Fees.
May 2015
Council of directed Staff to provide a by year maintenance and reconstruction plan for the
next five years.
June 2015
Council reviewed a sample five year plan and the impacts to the Levy to fund the plan.
Council provided guidance to create a funding source for Pavement Management Fund
with a dedicated Levy of $183,000.
December
Council deferred decision on road maintenance projects for 2016. Setting April of 2016
2015
as the date to review road planning and funding.
April
Council selected roads for Mill and Overlay but moved road funding discussion to the
2016
May work session
May 2016
Council directed funding discussion to be held concurrently with 2017 budgeting
discussions.
September
Council reviewed and provisionally approved a budget and associated levy that would
2016
have provided $401,000 annually in a Pavement Management Fund Levy
December
Council approved a reduced levy of $253,000 for the Pavement Management Fund
2017
December
Council approved a levy of $544,450 for the Pavement Management Fund and directed
2018
water tower telecommunication lease revenue be used for pavement.