HomeMy WebLinkAbout6.a. Overlay Projects CITY OF SHAKOPEE
Memorandum
TO: Mayor & City Council
Mark McNeill, City Administrator
FROM: Bruce Loney, Public Works Director
SUBJECT: Discussion of Street Overlay Program
j DATE: February 15, 2011
INTRODUCTION:
This memo is a follow -up on the discussion of long term capital financing from the
January 18, 2011 and February 1, 2011 meetings.
BACKGROUND:
From the February 1, 2011 Council meeting, the Council directed staff to bring back
information on overlay projects for 2011 and beyond.
On bituminous overlays, in 2006 staff did present a 2006 Pavement Management System
report on the future needs of maintaining pavements by seal coating, bituminous overlays
and street reconstructions. Staff has recommended the City should spend for the next
five years an amount of $780,000.00 per year for overlays.
Also, staff pointed that 45% of Shakopee streets have been built from 1995 to 2005. An
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average of 6.5 miles of streets were constructed per year and will fall in the overlay
category starting in 2016.
The Finance Director has included in the revised CIF schedule out to 2019 and to show
the overlay project cost for these years. The average cost of 6.5 miles of overlay was
used with an inflation factor to show the impact of street projects in the CIF for longer
than five years.
The revised CIF does not include street reconstruction projects as the 2006 Pavement
Report did recommend at some point to decrease or eliminate reconstructions and
concentrate on the overlay "Bubble" from the 1995 -2005 major construction years.
The overlay bubble is shown as follows:
• 1995 -1999 - 33.76 miles
• 2000 -2004 - 31.28 miles
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The goal of the overlay program is to keep pavements from going to the reconstruction
category as long as possible.
Staff has developed a comparison of costs between overlays, remove & replace pavement
and total reconstructions as follows:
Bituminous Overlays = $1
Remove & Replace Pavement = $2.4
Total Reconstruction = $5.00
This comparison is to show that the initial overlay cost is a 1 to 2.4 ratio to a remove and
replace pavement project and a 1 to 5 ratio to a total reconstruction project. The point of
this is to show that overlays can be a cost effective measure in extending the life of a
pavement.
In review of the revised CIF schedules, a tax levy - overlay amount is shown in
increasing amounts in order to provide the revenue source to manage the fund. Without
this tax levy, the fund would be depleted by 2019. These tax levy amounts are also
shown on the tax levy projections schedule as CIF- overlays, along with revised numbers
from County road projects after a meeting with Lezlie Vermillion and Mitch Rasmussen.
Another item being shown is a levy `buy down" of existing debt with CIF of
$880,000.00. Other options could be used such as 2010 underspend or building funds
used to build the fire station or future underspends. This "buy down" is to keep the
existing debt levy at a fairly constant amount. The debt levy amount is between
$748,326 and $925,113 per year and is in comparison to the City of Prior Lake's debt
service levy amount of $1,500,000 per year for street reconstructions and county road
improvements.
Another schedule shows the tax levy amounts being added with 30% assessments and the
impact to the CIF. It should be pointed out that bonding for overlays would cost
approximately $30,000.00 per year.
The results of these changes in the tax levy projection is that a 1% is obtained for years
2011 -2015. In year 2016 a decrease of -1.1% is seen due to projects like the Fire Station
#1 and other bond improvements being paid off.
Other discussion points asked of staff by the Council include splitting up the project for
2011. If Council desires to split the project, staff would recommend to do Vierling Drive
and streets north of Vierling Drive and east of Marschall Road. Staff does not
recommend splitting the areas as a larger project usually has better bid prices and
delaying an area would increase the backlog of streets in future years.
On the question of assessing overlays, staff presented information on June 15, 2010 for
not assessing and Council approved Resolution No. 7025 on August 17, 2010 to amend
the Special Assessment Policy.
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To assess bituminous overlays and then bond for the improvement would be more
expensive due to bonding and assessing costs, per Gregg Voxland's memo on January 12,
2011 for the January 18, 2011 meeting on street overlays. A CIF projected cash level
showing a tax levy — overlay amounts and 30% assess amounts is provided to show the
impact of assessments to no assessments.
Council should provide direction on how they want to finance bituminous overlay
projects in order to make a decision on the 2011 project. If Council desires to change the
Assessment Policy, it is unlikely staff can follow the public process in time to get good
bids this spring.
ALTERNATIVES:
1. Discuss the additional information and provide direction on how to proceed on the
2011 bituminous overlay project.
2. Discuss the additional information and provide direction on future overlay
projects
3. Table for additional information.
RECOMMENDATION:
Staff recommends alternatives No. 1 and No. 2.
ACTION REQUESTED:
1. Discuss the additional information and provide direction on how to proceed on the
2011 bituminous overlay project.
2. Discuss the additional information and provide direction on future overlay
projects
Bruce Loney, P.E.
Public Works Director
ENGR/2011- PROJECTS /2011 -C OUNCIL/O V ERLAY- DISCUSSION
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