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HomeMy WebLinkAbout09-04-2003 Council Work SessionTO: Mayor Peterson and Council Members FROM: Ron Moorse, City Administrator W^ DATE: September 3,2003 / SUBJECT: September 4,2003 Budget Worksession The Council will meet at 6:00 p.m. on September 4,2003, to determine the preliminary tax levy and General Fund Budget for 2004, and to review a seven year budget projection. Preliminary General Fund budget and Preliminarv Tax Levy The City is required to provide the preliminary tax levy to the County by September 1 5. The final tax levy and budget will be adopted after the Truth-In-Taxation hearing, to be held in late November or early December of this year. The tax levy can be reduced after September 15, but cannot be increased. Attached are three spreadsheets reflecting revisions to the General Fimd budget and the tax levy. The General Fund Budget Expenditure Summary reflects a revised proposal related to compensation adjustments, and additional expenditures related to the hiring of an additional Police Officer in the fall of 2004. The total General Fund budget is still being reduced by $11,390 from the 2003 budget. The General Fund Revenue Detail reflects an increase in Police Serx'ice Revenues to offset increased Police Service expenditures related to the proposed compensation adjustments. The total Tax Levy for 2004 is proposed to increase by $99,530, or 3.27%. Ihe Tax Levies spreadsheet reflects an increase in the levy for equipment certificates to replace Public Works equipment. The levy for this purpose was increased from $85,000 to $125,000. The $85,00*^ levy would have enabled the replacement of an 11-year old tractor-mower, and a 20-year old V* ton pick' up. 1 he additional $40,000 levy is to enable the replacement of a 12-year old brush chipper, at a cost of $40,000. The brush chipper replacement had initially been deleted from the budget request when the total tax levy was proposed to increase by about 4%. Since that time, the tax levy for the Navarre Fire Station bonds was reduced by over $50,000. This enables the equipment certificate levy to be increased by $40,000, while holding the total levy increase to 3.27%. Seven Year Budget Projection Attached is a spreadsheet showing a seven year budget projection, and a memo explaining the key factors and assumptions in the projection. The budget projection was prepared to show the Council the effect on the tax levy and tax capacity rate of addressing several substantial needs over the next years, and to provide the Council with a longer term perspective within which to make its decision about the tax levy for 2004. r’ ;■ -4 ''■‘"I, 1 ^'1 Hi. City of Orono • lO Ins • .03 Wase I i^-4 RWi’w::* 3^- 'mmmm City of Orono 2004 General Fund Expenditure Budget Summary 2002 ACTUAL 2003 nunctrr 2004 Budget Dollar Increase fDecrcasc3 % Increase /Decrease) !Personal Services 2.765,579 2,850,900 2,974,540 123,640 4.34% Supplies & Maintenance 470,155 461,960 372,460 (89,500)-19.37% Professional Services 750,366 760,380 803,630 43,250 5.69% Insurances 72,340 74,520 78,250 3,730 5.01% Other Expenses 293,149 358,120 317,610 (40,510)-11.31% Capital Outlay 83.988 102,000 uo,m 8,000 7.84% Transfers to Other Funds 116.065 • 105.000 45,000 (60,000)57.14% Total 4.551.642 4,712,880 4.701.490 (11.390)-0.24% Ti I liMiri *-*■>-------- I i ^ * . ’ 1 09/03/2003 10:45:34 AM Revenue Source Property Tain Beer A Liquor Licenses CigareUe Licenses CommcrctaJ Dock Licenses Septic Licenses Garbage HAuler Licenses Dog Licenses Othr« Business 1 icenses Total Baiiacff U«fii€i Building Permits General Permits Other Permits Total Permits Federal Grant-Emerg Prep HACA Aid/MVC Local Government Aid - LGA Payroll Aid Police Training Rcimbursenient Police State Aid PERA State Aid State Grants/Aids • Other Federal Grant-COPS MSA - Streets County Grant-Recycling Aids / Grants from Other Govts Total latcrgoverameatal Revenue Plan Check A Site Exam Fees Conditional Use. Variance. A Subdivision On-Site Septic Program Fees Recycling Program Fees Contracted Public Works Services Intel departmental Scrv iccs-Public Works Administrative Charges for Services General Taxable Sales Assessment Searches Building Permit Mail-in Fees Total Gen Govi Service Chrgv Rev Contracted Police Scr> iccs Contracted Animal Control Serv ices Police Special Services Contracted Inspection Services False Alarm Fees Police Reports Police Reserve/DARE Program Receipts Total Public Safety Serv Chrg Rev Court Fines Dog Impound Fees Total Fines and Forfeits Revfllf Interest on Investments NOW Interest Total lavestmeat Rev cant Payments In Lieu of Taxes Miscellaneous Revenue Rent Income Contributions A Donations Sale of Equipment A Land Tra«vsfcr In Total %liscellaneo«fl Rrvenne Total Revennet and Translrrs In 2001 Actual 1,964.527 5.725 1.100 0 0 525 5.571 l.%8 I4J89 28S.37I 52.241 13.759 "354.371 3.422 309.627 9.278 8.318 91.321 7.219 1,557 89.684 98.076 15.957 0 634.459 163.064 47.073 52.640 66.859 5.801 5.575 99.670 3.613 200 419 444^14 717.302' 31.576 51.522 12.323 12.568 1.640 50 826.Mi 106.571 1.686 108,257 ■ 58.971" 2.420 6U91 630" 2.997 5.400 0 •.074 21.414 38315"^ City ofOrono General Fund Revenues For 2001 2002 Actual 2,411,043 6,700 1,200 0 0 685 2.058 1.503 12,146 323.204 40.981 25.673 389358 0 63.069 9.283 0 8.9C/9 99.327 7.219 2.080 40.715 101.622 17,427 3.305 352,956 179.945" 53.058 52.483 67.540 :.970 10.674 63.610 3 393 360 355 434J88 765.783 31.381 55.105 20.9 IS 10.320 1.103 0 084310 97.983' 1.325 99408 ’49.i ’3V 1.517 50353 0 4.648 5.400 0 11.343 0 21491 4348404 4356453 Total Expenditures Use ofFuinl Balance Total Revenues Over (Under) TottJ Ex4^itira Adjusted Dollar 2003 2003 2004 Increase thru June Dudeet Budget (Decrease) ___________^0 2,550,040 2,596320 46,780 2,700 4.000 4.080 80 I,t00 1400 1400 0 0 0 0 0 0 0 620 520 520 0 5.035 2.800 2.800 0 1.768 2,500 2500 0 11423 11,020 11,100 80 135.582 280 000 288 000 8 06o" 18.410 55.000 52,000 (3.000) 8.227 16.500 16.500 0 162419 351400 356300 5,000 0 6 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 8,080 7,000 (1.080) 0 91.800 91.800 0 0 7.220 7420 0 0 0 0 0 0 0 0 0 54.144 104400 100,000 (4400) 100 5,530 0 (5.530) 0 0 0 0 M444 2I/,i3o 206320 (11.110) 78.i(M 150.000 155.000 5.000^ 17,760 43.000 63.000 20.000 0 53,000 53.000 0 0 67.260 67.600 340 0 5.000 2.500 (2400) 174 7.000 7.000 0 36.260 72,400 74.600 2400 1.425 2.500 2.500 0 90 100 too 0 174 500 500 0 134,047 __ 4tM.76t»‘*425300 25,040 329.7f5 /vo.olO 833.0UV 36490 16.111 31.930 32,890 960 13.593 48.000 45.000 (3.000) 3.0.S8 15.000 10,000 (5,000) 3,950 15,000 10.000 (5.000) 494 1.500 1.500 0 250 0 0 0 367,201 9M.04n 932490 24450 43.166 UO.OOO 95.000 (15.000) 555 1.500 1,500 0 43,721 111,500 96400 (15300) 0 70.006 40.000 (30,000) 65 2.000 1.000 (1.000) 65 72.0M 41300 (31,66b) 0 1400 I.3KX)0^ 611 5.500 4.960 (540) 2,700 5.400 5.400 0 4,000 0 0 0 0 15.000 8,000 (7.000) 0 0 0 0 7411 27400 19360 (^-MO) WMJi 4349,190 4305,790 _____^36,^ 4,712.880 4,701.490 • (63.690)(15.700) i I j f t maniii r r ■» t*» Kl* g •M^.. • CITY OF ORONO TAX LEVIES ACTUAL ?,003 vs PROPOSED 2004 TAX LEVIES TAX LEVY rOLLECTIRLE 2003 2004 INCREASE (DECREASE) Vil^tll IWWCrWHTiiMwM.IM PERCENT CHANGE General $2,509,684 (a)$2,509,684 (a)$0 0.00% Infrastructure (PIR)35,450 35,450 0 0.00% Park Land Acquisition and Development 5,000 5,000 0 0.00% Total Levy Subject to Levy Limit 2,550.134 2.550.134 0 0.00% Market Value Credit Lost To State of Minn.(54,410) (a)(54,410) (a)0 •0.00% 2004 Add Back • 60% of MVCt & LG A Reductions -0- (a)38,216 (a)38,216 na Tot.’it Levy Limit, Net of Market Value Credit Loss 2,495,724 2,533,940 38,216 1.53% Special Levies: General Fund - PERA Rate Increases 4,980 (a)5,540 (a)560 11.24% General Fund - COPS Grant Decrease 14,786 (a)14,790 (a)4 0.03% General Fund • Capital Equipment Cert. '75,000 (a)83,000 (a)8,000 10.67% Imp & Equip Outlay • Capital Equip Cert -0-125,000 125,000 na 1992 Improvement Bond Debt Service 45.000 0 (45,000)-100.00% 1997 Improvement Bond Deal Service 15,000 18,000 3,000 20.00% 1999 Improvement Bond Dcjt Service 15,500 5,000 (10,500)-67.74% 2000 Improvement Bond Debt Service -0--0-0 0.00% 2003 Imp Refunding Bond Debt Service -0-35,000 35,000 na 1998 HRA Refunding Bond 3ebt Service 250,000 250,000 0 0.00% Fire Facility and Equipment Bond Debt Service 128,000 73,250 (54,750) TOTAL SPECIAL LEVIES 548,266 609,580 61.314 11.18% TOTAL TAX LEVIES FOR ALL PURPOSES $3,043,990 $3,143,520 $99,530 3.27% • NOTE! Levy limits svere reiastitnted by the 2001 Legislature. Total General Food 2,550,040 (a)2,596,820 (a)1.83% moat • •...............- 11 iirini I i TO: FROM: DATE: Mayor Peterson and Council Members Ron Moorse, City Administrator September 3,2003 SUBJECT: 2004 Budget —Additional Information To assist the Council in making a determination of the levy amount for the 2004 budget, additional information is being provided regarding both current and future needs and expenditures. This information includes a seven year budget projection and a report regarding long term street rehabilitation expenditures. Although it would be possible to limit the overall 2004 levy increase to less than 2%, this is due to a number of factors that are independent of the significant current and future needs of the City. The 2003 tax levy included $128,000 for the estimated debt service on the Navarre Fire Station bon^. Because the actual debt service schedule for the bonds calls for lower payments in the early years and higher payments in the later years, the $128,000 levy can be reduced to a $70,000 levy for 2004. This is the main factor that enables the minimal increase in the 2004 lcv>'. In addition, the tax levy for operational costs in the General Fund has been minimized to enable compliance with the State-imposed levy limit. However, we know that in the coming years, not only will the levy required for the fire station bonds increase, but the levy for a number of other needs will also need lo be increased. Seven-Year Budget Projection The attached budget projection is provided to give the Council a longer term picture of upcoming need i, and to provide a funding scenario to show the impact on tax lc\ ics and tlic lax capacity rate over the seven year period. The basic assumptions of the budget projection are as follows: 1. Expenditures. All current operating expenditures (with the exception of the additional expenditure items identified in the budget projection) will increase by 3% per year. 2. Revenues. A. All non-tax-levy revenues, with the exception of building-related revenues and police service revenues, will remain constant, B. Building-related revenues and police ser\ icc-rclated revenues will increase by 3% per year. C. A COPS grant in the amount of $75,000 over three years will be used to provide a portion of the funding for the Police Officer proposed to be hired in late 2004. D. One-third of the costs of major street rehabilitation is proposed to be funded through special assessments on the benefited property owners. E. All other revenues to fund the new expenditures included in the budget projection, will come from the tax levy. 3. Tax Capacity. r A. Tax capacity will increase 10% in 2004,10% in 2005, and 5% in each of the remaining years. Projects, programs, services, and goals requiring additional resources 1. Police Services. The Police Department has an immediate need for an additional ofllcer to enable continuing drug enforcement efforts, and an additional Investigator. With the construction of the Stonebay development, and proposals for development/redevelopment along Highway 12 in both Orono and Long Lake, the Department will need to add an officer to handle the additional workload. 2. Information Technology/Finance. The workload of the Finance Department has been increasing, both in the accounting/fmance area, and in the information technology area. Reporting requirements related to the Tax Increment Finance District for the Orono Woods senior housing project, and for an affordable housing assistance program, have added to the workload. The new GASB 34 accounting standards that have been mandated for all cities will also add to the workload. The City’s information technology capabilities have increased dramatically in recent years, both in terms of the quality of the technology, and in terms of the number of computer workstations. Managing this system of hardware and software is requiring more time. The Finance Department needs to add a part-time staff person to take on some of the accounting workload, to enable the IT coordinator to handle the increased IT workload. 3. Human Resources Administration. Additional staffing is needed to get persoiuiel policies, procedures, and programs up-to-date to meet the needs of the City and its employees, and to ensure legal requirements are met. These needs could be met by hiring a part-time Administrative Intern. Summar>' of Impacts of Projected Expenditures To address the needs identified above, substantial expenditures for both additional staff and street rehabilitation would be necessary. The attached table shows the projected additional expenditures over a seven year period, and the impacts on the tax levy and the City’s tax capacity rate. City of Orono Seven Year Projections Budget Year Budget Year ExpendHufee 2004 2005 Budget Year 2006 Budget Year 2007 Budget Year Budget Year Budget Year 2008 2009 2010 General Fund Expenditures Position Additions: Police officer #1 Police officer #2 Police officer #3 Part-time Finance Part-time Admin Intern Tolal General Fund Expend 4.701.490 4.842.500 4.987.800 5.137.400 5.291.500 5.450.200 5.613.700 20.000 42.420 72.570 80.600 84.790 87.650 -28.970 65.210 71.050 78.990 86.530 -———32.200 72.270 28.880 31.370 33.980 35.180 36.390 37.640 26.390 27.370 28.380 29.400 30.450 31.530 4.917.770aacm! ,««■ mm 5.117j30 S,337^___5^507,730 Revenues General Fund Revenues: Tax levy 2596 820 2.786.600 2.947.400 3.124.400 3.250.680 3.410.740 3.580.470 Bulkting/Iand use revenues 506.000 521.160 536.800 552.900 569,500 586.600 604.200 Contracted Police Services 833.000 857.990 883.730 910.240 937.550 965.680 994.650 All other rever >749,970 750.000 750.000 750,000 750.000 750.000 750.000 Use of fund balance 15.700 —— Total Gen Fund Revenue 4.701,490'mta.. ^ . -vt mm 5.11?.93p. .-.P.SPZJ30 ,_ 5,713,020 1_5.929,320“ Expenditures • Ta/ Supported Non-General Fund PIR Fund - Street Rehab Projects Debt Serv - $2,000,000 Street Bond Park Fund • Improvements 35.450 5.000 45.500 60.000 5.000 55500 60.000 20.000 65.500 100.000 25000 75.500 125.000 30000 85.500 125.000 35000 95.500 125.000 40.000 Fund -IST" Tax Levy 2004 Tax Levy 2005 Tax Levy 2006 Tax Levy 2007 Tax Levy 2008 Tax Levy 2009 Tax Levy 2010 Tax Levies General 2.596.820 2.788.600 2.947.400 3.124.400 3.250.680 3.410.740 3.580.470 PIR - street rehab 35.450 50.500 55.500 65.500 75.500 85.500 95.500 Park land A & D 5.000 5.000 20.000 25.000 30.000 35.000 40.000 Debt levies Street bonds -60.000 80.000 100.000 125.000 125.000 125.000 Cer^aai cert. F V 125.000 67.600 UU.2G0 92.900 US.700 98.600 lOl.oou 1997 bonds 18.000 18.000 18.000 20.000 20,000 20.000 25.000 1999 bonds 5.000 5.000 5.000 5.000 5.000 5.000 5.000 2000 bonds ---———— 2003 refunding 35.000 35.000 35.000 33.000 -—- 1998 HRA 250.000 250,000 250.000 250.000 ——— 2003 HRA Fire 73,250 73.250 73.250 134.100 205.500 208.100 209.900 Total aO levies ~ 3J43,520^ _JJ,372,950.~ 3574.350__3.849.900 3.807.380 “3.987.940“'4.182 470 M 8st 2004 is final ieyy kmjt yey UOMfMMM Mpi «n Tax levy Tax Capacity Tax Capacity Rate Rate % lncf/(Dea) Tax levy Increase Tax levy % IncrejM 2003 3.098.400 15.585.647 19 88%—— 2004 3.143.520 18.153.975 1732%•1290%45.120 146% 2005 3.372.950 19.969.373 16 89%-2 46%229.430 7 30% 2006 3.574.350 20.967.841 17 05%092%201.400 597% 2007 3.849,900 22.016.233 1749%2 58%275.550 771% 2008 3.807.380 23.117,045 16.47%-581%(42.d20)-1.10% 2009 3.987.940 24.272.897 1643%-0 25%180.560 4 74% 2010 4.182.470 25.486.542 16.41%•0.12%194.530 4.88% August 20,2003 To: Ron Moorse From: Greg Gappa Subject: City Street Rehabilitation Program Introduction The City of Orono historically has had a limited budget for street rehabilitation projects. The only street reconstruction completed has been Municipal State Aid funded projects, and sanitary sewer projects. Recent sewer projects have included street reconstruction to a higher standard, but for the sewer projects that were completed in the 1960's and 1970 ’s the streets were replaced to minimal standards. Over the past several years, the budget for pavement overlays was increased significantly and progress was made in overlaying streets. Today, City streets are in fairly reasonable condition, and with the patch truck we are able to more eftlciently patch streets. The only road that is in very poor condition is Starkey Road. This road only provides access to one home in Orono, a Tlwee-Rivcrs Park District group camp in Baker Park, and four homes in Medina. There is no platted right of way for this road, but it has been maintained for public use for many years and we could claim a prescriptive easement for this road. Repair or upgrading of this road is very low priority. The greatest concern for the condition of City streets is the amount of development and redevelopment occurring. Development can be detrimental to streets because of the large amount of heavy truck trafllc. roi tunateI>, in the northern, lower density areas of Orono we are nearing a full development condition which should reduce the amount of construction traffic in the future. Also, in this area, most of the construction traffic is on county roads or state aid streets. However, a concern is the increasing intensity' of lakeshore redevelopment on Lake Minnetonka. A good example of this concern is Casco Point Road. Most of this street has been overlaid, but the pavement is already showing signs of deterioration. This street would be fine for normal residential traffic, but this road is not adequate to handle the heavy construction traffic that is occurring. Local Roadway System Orono’s local roadway system includes sixty miles of City streets (20 % of which are State Aid Streets) and County Roads. The State Aid Streets and County Roads carry the vast majority of local traffic. The non-State Aid streets serve specific neighborhood needs, and have low traffic volumes. Municipal State Aid Roads and Funding Twenty percent of our City streets arc Municipal State Aid streets, wdiich is the maximum percentage allowed by State Statute. These State Aid streets include collector streets such as Old i Crystal Bay Road, Willow Drive, Brown Road North, North Ferndale Road, McCulley Road, Watertown Road, and Fox Street. The City receives about $400,00 per year in construction funds for use on State Aid streets. These funds are generated front state gas ta.xes. Statewide, there is increasing concern the current level of State Aid funding is inadequate. Historically, Orono’s concern with the use of state aid funding has been the requirement that roads need to be widened to meet State Aid standards in order to be eligible to use State Aid. funds. The use of State Aid funding would be very difllcult on Fox Street and Watertown Road because of the number of trees and wetlands along these roads. Over the next several years, our State Aid funding can be used on wider roads such as Willow Drive, Old Crystal Bay Road, and McCulley Roads. However, this leaves the issue of funding projects on Watertown Road and Fox Street unresolved. There are several areas of Watertown Road that are showing signs of pavement failure,which needs to be addressed. Local Streets and Funding We have about fifty miles of City streets that are not eligible for state aid funding. Most of them are narrow, lower traffic streets. Many are dead end streets. The biggest issue with these narrow, dead end streets is the lack of an adequate cul dc sac, and in numerous situations private driveways arc used as a turnaround space. There arc several potential sources of funding for projects on these streets. These include tax levies, special assessments, and possible stormwater utility funding for stormwater improvements on these streets. Tax le%7 funding can be either pay as you go for projects, or bonding for projects. Levies for debt service are outside of the levy limits. The use of special assessments is difficult because of the ikcu to demonstrate a benefn to the property that equals the assessment. The use of assessments in Orono is complicated by the relatively lower density of development in the City. Based on a feasibility study that was completed several years ago for Rest Point Road and assessment policies in other cities, for planning purposes we are recommending assuming a maximum assessment of 1/3 of the project costs. Statewide, the number of assessment appeals for street projects has been increasing over the past several years. The cities that have had the most success prevailing in assessment appeal cases have before and after appraisals for property values completed. The city ’s stormwater utility funding is limited and using these funds for street reconstruction reduces the amount of funds available for other stormwater projects. For planning purposes, we are recommending funding 20% of project costs from the stormwater utility funds. In summaiy , the percentage of project costs that could possibly be obtained from special assessments and stormwater utility funds is approximately 50% of the project costs. This means that the other 50% of project costs will need to be funded with tax levy funds. Over the past several years, the tax levy in the PIR Fund and the Contracted Street Maintenance budget line item has been about SI 30,000/year which is a substantial increase from the $40,000/year the City had been budgeting for street improvement projects for many years. With these additional funds many streets have been overlain and a marked improvement in the quality of the City's ’s streets has occurred. There are several problems associated with paveinerit ow-rlays. The first concern is that while these projects increase the pavement strength, the paventj^ni .' tiength is still substandard and the heavy construction traffic damages these streets. Another concern is the number of existing cracks that appear in the new overlay. These reflective cracks then allow for water infiltration into the pavement resulting in freeze thaw damage. The expected life of these pavement overlays is variable depending on the condition of the existing street and the amount of construction traffic. The expected life of these overlays can range from 10 to 20 years. On some busy roads in areas with a lot of construction traffic, such as Casco Point Road, these pavement overlays may last less than 10 years. Casco Point Road is one of our more problematic roads because of the large amount of lakeshore redevelopment construction traffic. This is also a high traffic road. Complete reconstruction may be inevitable for this road. There are several lakeshore roads, such as Rest Point Road, in the Saga Hill area with steep grades and erosion problems that may warrant reconstruction with curb and gutter and storm sewer. These streets are also not eligible for State Aid funding and cannot ever be put on the State Aid system because they are dead end roads. Many of the other strcet.s in the Navarre and Saga Hill areas have lower traffic volumes, are dead end streets and have less redevelopment traffic. Complete reconstruction of these streets may not be necessary and less expensive rehabilitation 'options may be appropriate. In the lower density area of northern Orono, most of the main roads are on the State Aid system, so there is funding available for these roads. However state aid funds may not be appropriate for Fox Street because of the number of wetlands and trees that would be impacted to widen this road to state aid standards. Orono Orchard Road is one of the main roads in the City that is not eligible for state aid funding because it does not connect to a County Road or State Aid Road on the northern end. Long Lake has less than 5,000 people, so it is not eligible to receive for state aid funds. This road is in poor shape and needs to be repaired and a simple pavement overlay is not appropriate for this road. This road should probably not be repaired until after the new Highway 12 project is completed. During the new highway project construction, the normal traffic flow will be disnipted and additional road work in the area not a good idea. Options for Street Rehabilitation There are several options available for the rehabilitation of streets ranging from a pavement overlay to complete reconstruction. For cost estimating purposes a 20 ’ street width will be used. Orono City streets range from approximately 12 to 28 feet in width for vost esti..;aimg purposes assume a 20' street width. Below is a tabulation of cost per mile of street for various options with advantages (+) and disadvantages (—) Pavement Overlay $7S,000/mile +Increased pavement strength -Raises road elevation possible drainage concerns. Existing cracks appear in omlay Pavement Overlay with Geotextile Fabric S100,000/mile +Greater increased pavement strength than an overlay without fabric -Raises road elevation possible drainage concerns, Fewer existing cracks appear in overlay Mill Pavement and Overlay $1 25,000/mile +Road elevation constant -No increase in pavement strength. Existing cracks appear in overlay Reclaim Pavement and Overlay $125,000 to $250,000/mile +lncrcased pavement strength. Eliminates existing cracks in new overlay —Raises road elevation if some of the existing material not removed to maintain same elevation -No increase in pavement strength if some of the existing material is removed Reconstruction without Concrete Curb and Gutter and Storm Sewer S600,000/mile +Puvemcnt strength increased to a 7 or 9 ton standard -t-Eliminates need to post road for seasonal weight restrictions +Aliows for minor elevation changes to improve drainage + Maintains existing overland drainage patterns -Does not allow for the installation of draintile to correct subsurface drainage problems - No curb and gutter to protect road edge from tralTic damage and erosion -No storm sewer to correct more serious drainage problems Reconstruction w ith Concrete Curb and Gutter and Storm Sewer $1,000,000/m ile+ +Pavement strength increased to a 7 or 9 ton standard +Eliminates need to post road for seasonal weight restrictions +Allows for the correction of more serious drainage problems -f Curb and gutter to protect road edge from traffic damage and erosion -Costs may exceed $1.000,000 mile based on the complexity of the storm sewer system required -Allows for the installation of draintile to correct subsurface draiitoge problems -Changes drainage patterns -Difficult to locate storm sewer outlets especially in fully developed lakeshore areas -Will most likely require stormwater ponding or other stormwater treatment Summary In summary, the City of Orono needs to consider additioiuU funding for road rehabilitation projects as the current tax levy amount of $130,000 will not be adequate for the long term. The potential for other funding mechanisms such as bonding, special assessments, and the use of stormwater utility funds needs to be considered. There are many considerations that need to be evaluated for a street rehabilitation program. This report discusses the available techniques and estimated costs. Each street will need to be evaluated to determine the most cost effective and appropriate method for repair To determine an approximate estimate of annual cost an estimated design life for projects of 20 years is reasonable. Estimated cost range from $75,000 to $1,000,000/ mile depending on the type of projeet selected. For estimating purposes a cost of $200,000/ mile will be used. This is based on c majority of less expensive projects and several high cost reconstruction projects. The City has 50 miles of non state aid streets and based on a 25-year design life 2.0 miles of streets need to be repaired each year at an estimated cost of 200,000/mile this results in an average annual cost of $400,000/year. This is a long term average, and most years, the actual costs will be much lower, but in years when a major project is completed the costs will be much higher and bonding may be appropriate for these projects. However, debt service payments must be made every year on these bonds and smaller projects also need to be completed. In conclusion, the use of $400,000 as an average annual cost of a street rehabilitation program is recommended for consideration. Based on funding 50% of these costs through the tax levy, the recommendation is to increase the annual levy for street rehabilitation to $200,000. City of Orono Tax Capacity, Local Levy. & Tax Capacity Rates TAX CAPACITY Real Estate Personal Properly Deduct Tax Increments Deduct Contrib Fiscal Disp Add Distribution Fiscal Disp Net Tax Capacity (To calculate rate) LOCAL LEVY Total levy all funds TAX CAPACITY RATES General Revenue PIR Infrastucture-Storm Sewer / Roads Parks - Land Acquisition & Development Improve & Equip • Capital Equipment Debt Service HRA Building Bonds Fire Facility & Equipment Bonds Debt Total Local Tax Capacity RaU ICOCriMaMvTAXCAPI.IU A-2 5004 Over (Under) 2003 Actual Estimated 2003 2004 Amount Percent J 15.547,498 $18,120,386 $2,572,888 16.55% 112,175 110,057 (2.118)-1.89% (3.600)(3,600)0 0.00% (269,786)(279,146) (9.360)3.47% 199,360 ___ _2p6,278 6.918 3.47% $I5,585,647_^ _ $18,153,975 $2,568,328.__16.48%, ^$3,098,400 $.3,143,520 $45,120 1.46% 16.702%14.304%-2.3‘)8%-14.36% 0.227%0.195%-0.032%-13.98% 0.032%0.028%-0.004%-13.93% 0.000% 0.689%0.689%— 0.484%0.319%-0.165% -33.99% 1.603%1.377%-0.226%-14.09% 0.821%0.403%____ 34 ll^*— 19.869%___17J16%____-2.553%-12.85% -i KiiaObi '1 CITY OF ORONO TAX LEVIES ACTUAL 2003 vs PROPOSED 2004 TAX I.F.VIF.S General Infrastructure (PIR) Park Land Acquisition and Development Total Levy Subject to Levy Limit Market Value Credit Lost To State of Minn. 2004 Add Back - 60% of MVCr & LG A Reductions Total Levy Limit, Net of Market V'alae Credit Loss Special Levies: General Fund - PERA Rale Increases General Fund - COPS Grant Decrease General Fund • Capital l-Iquipment Cert. Imp & Equip Outlay - Capital Equip Cert 1992 Improvement Bond Debt Service 1997 Improvement Bond Debt Service 1 999 Improvement Bond Debt Service 2000 Improvement Bond Debt Service 2003 Imp Refunding Bond Debt Service 1998 HRA Refunding Bond Debt Service Fire Facility and Equipment Bond Debt Service TOTAL SPECIAL LEVIES TOTAL TAX LEVIES FOR ALL PIJRI’OSES NOTE! Levy limits were reiastituted by the 2001 Lcgislatvre. Total General Fund 2,550,040 (a) _2,5%,820 (a)46,780 TAX LEVY COI.I FiCTIBI.E INCREASE PERCENT 2003 2004 (DECREASE^CHANGE $2,509,684 (a]) $2,509,684(a) $0 0.00% 35,450 35.450 0 0.00% 5,000 5,000 0 0.00% 2,550,134 2,550,134 0 0.00% (54,410) (a) (54,410) (a) 0 -0.00% -0- (a]1 38,216 (a) 38,216 na 2,495,724,2,533,940 38,2 16_1.53% 4,980 (a]» 5,540 (a) 560 11.24% 14,786 (a]1 14,790 (a) 4 0.03% 75,000 (a)1 83.000 (a) 8,000 10.67% -0-125,000 125,000 na 45,000 0 (45,000)-100.00% 15,000 18,000 3,000 20.00% 15,500 5,000 (10,500)-67.74% -0--0-0 0.00% -0-35,000 35,000 na 250,000 250,000 0 0.00% _ 128,000 ____73.250 _ (54,750) ____i-P- _____ 548.266 609,580 _ 61,3 U 11.18% $3,043,990 $3,143,520^$99,530 3.27% 1.83% •* '‘;- lilTcct of 2004 Tax Levy & Budget on Homes • 2003 Tax Capacity (net) - IH of first $500,000 market value, plus 1.25% of all value over $500,000 2004 Tax Capacity (net) - 1% of first $500,000 market value, plus 1.25^« of all value over $500,000 A.. ^ ' ’*■ City ofOrono • 2003 Budfet mmmm -V ^ V Market Value for 2003 Taxes $200,000 $350,000 $500,000 2003 2004 5% incr 2m 10% incr 2003 2004 5*/o incr 2004 10% incr 2003 ?004 5% incr 2004 10% incr EillniAtMl Market Vatae S200.000 $210,000 12 0,000 $350,000 $367,500 $385,000 $500,000 $525,000 $550,000 Tax Capacity (Net) •2.000 2.100 2,200 3,500 3.675 3,850 5.000 5,250 5,500 Tax Capacity Rate p;.»ti*/%r».3I6S 17 316%17.316%17.316%19.869%17.316%17.316% Net Tax S397.38 $363.64 $ 80.95 $695.42 $636.36 S666.67 $993.45 $909.09 $952.38 $ Increase (Decrease) from 2003 -($33.74)(M6.43)($59.05)($28.75)($84.36)($41.07) % fncr^isc (Decrease) from 2003 mm •8Jr«-4.1%•8.5%•4.1%-8.5%•4.1% >1 I'dgeS . ;-r N •',’ '••■.• ■■" ■ ' • . : ‘ ‘ ti •• . ■’ I ’ f ' ■ • . • ' ^ V • T ' ■'* ’:K.tm ■f: CiW of Orono ♦ 2003 Tax Capacity (net) - 1.50S of HrstS 150,000 morket value, plus 2.<)9i of all alue over SI 30.000 2004 Tax Capacity (net) - 1.50% of first SI 50.000 matet value, plus 2.0% of all olue over SI50,000 Crty of Orono • 2003 Dudgil HITcct of 2004 Tax Levy & Budget on Commercial Property For Mark.l Value .ifS500,000 2i!Qi 2004 2004 5% Incr.10% Incr. Estiilialcd Marfcrt Value S500.000 S525.000 S550.000 Tax Capacity (Net) *9.250 9.750 10.250 Tax Capacity Rate I9.869H 17.316%17.316% Net Tax Sls837.88 SI,6S8.3I $1,774.89 S Increase (Decrease) from 2003 -(S 149.57)(S62.99) % Increase (Decrease) from 2003 -•8.1%-3.4% Page 6, J Mjf,ife.I....■> CITY OF ORONO NOTICE OF PUBLIC MEETING NOTICE is hereby given that the Orono City Council will meet in a work session at 6:00 p.m. on Thursday, September 4,2003 in the Orono City Council Chambers, 2780 Kelley Parkway, Orono, Minnesota. The purpose of the work session is to review the proposed 2004 budget, and to discuss other issues of current interest. /s/ Linda S. Vee City Clerk Posted at: City Hall Navarre Post Office Long Lake Post Office Crystal Bay Post Office I iniiiiiiiiiiiiiiiniifci M.