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REQUEST FOR COUNCIL ACTION DATE: 05/16/05 ITEM: 6 Department Approval: Manager Reviewed: Agenda Section: ~ ~ ~ ` r Item Description: Consider the City's Interest in Financing Expansion of Highway 36 Eastbound to Three Lanes Background: Mn/DOT has now assigned a project manager and has begun preliminary project development for the replacement of the Lexington Avenue bridge. This project was rescheduled due to a shortage of funds and is now expected to be bid in the fall of 2008 for construction in 2009-2010. The idea of a third eastbound lane expansion has previously been discussed with the Council by Mn/DOT. They currently do not have the funding to pursue this expansion. As this project is currently programmed for 2020-2030, they have requested that the City consider financing the expansion of the third eastbound lane. Reimbursement would be made to the City at a future date when funding becomes available for this improvement. We have not received the terms of this type of financing but expect to have this information at the work session. The following is a summary of the projected costs of adding a third eastbound lane to Highway 36. Add eastbound 3r lane from 35W to Rice St. $14.2 million Add eastbound 3` lane from 35W to 35E $15.5 million Add eastbound 3r lane from 35W to Dale $12.8 million All estimates have the followin in common: Widen eastbound Cleveland and Fairview bridges $2.0 million Noise walls $4.0 million Assumptions (not proven): No right-of--way is needed Additional land for drainage is not needed According to Finance Director Chris Miller, considering our size, scope of operations, and financial resources, we would not be able to provide a loan of this magnitude and for this extended period of time without dangerously weakening our overall financial condition. Reducing the City's financial assets by the amount prescribed above would have an immediate impact on the City's ability to provide existing levels of service; it would immediately lower the City's credit rating; and would effectively wipe out the 20-year effort made by previous Councils to create sustainable funding mechanisms for the City's core functions.