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PMP Memorandum April 10, 2002 Page 2 . . Current Funding Summary The following is a summary of thc current funding mechanisms in place for the City's PMP needs and the corresponding annual contributions summcd for twenty years. Thc assessment contribution is based upon the current assessment policy which requires residential properties to contribute 50% of the benefit received from the improvement project. For this analysis, we have assumed that asscssmcnts would contribute half of the strcet reconstruction and overlay costs from the analysis above. This assumption translates to assessment rates of $62.50/FF for reconstruction and $12.50/FF for overlay projects. Both of these assessment rates are greater than ratcs historically levied by the Council for projects. Thc Storm Water Utility fund is assumed to contribute 20% of the project costs for reconstruction projects and 2.5% of project costs for overlay projects (for residential streets). Regional drainage improvements such as ponds and grit chambers etc. are also funded from the Storm Water Utility fund and are not included with this analysis. The General Fund is assumcd to contribute $200,000 per year (approximate current levcl). The city reccivcs an annual disbursemcnt from MnDOT State Aid which offsets projcct costs for State Aid routes but is not assumed to reduce the assessments levied for projects based upon past City policy. . General Fund Outlay $200,000*20 Storm Water Utility 0.2*$17,200,000 + 0.025*$4,500,000 Assessments 0.5*$17,200,000 + 0.50*$4,500,000 State Aid $200,000*20 Total 20 Year PMP Funding (2002 dollars) =$ 4,000,000 =$ 3,552,500 =$10,850,000 =$ 4.000.000 =$22,402,500 Annualized PMP Funding (2002 dollars) =$ 1,120,125 As a result of relatively minor investment in the City's pavement infrastructure since 1998, the City has accumulated a substantial amount of capital reserves as of January 1, 2002: Round Lake Road Reconstruction (Ph 2) Gencral Fund Carry Over 2000 General Fund Carry Over 2001 One-Sided Street Fund Storm Water Utility State Aid Balance Total PMP Reservcs as of Jan 1,2002 $ 250,000 $ 150,000 $ 150,000 $1,500,000 $ 400,000 $ 600,000 $3,050,000 . Based upon the macro analysis above, the City funding mechanisms and contributions are essentially equivalent to the 20 year annualized needs with a healthy reserve of over 3 million dollars currently. Therefore, it doesn't appear that the City needs to modify cxisting funding mechanisms in order to achieve the twenty year PMP needs. It should be noted however, that assessment contribution towards total project costs have been closer to 36% (for reconstruction projects) in the recent past and not the 50% stated in the policy. If the City maintained an assessment contribution in the range of 36% over the next twenty years the total PMP funding would be reduced by $2,408,000 from $22,402,500 to $19,945,500. This deficit could be