2008-08-26_PWETC_AgendaPacket - Laserfiche WebLink

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g~ u To: Public Works Commission Members From: Duane Schwartz, Public Works Director Date: 08/22/2008 Re: 2009 Budget Zera Increase Impact Areas The recent energy cost increases coupled with levy limits for the next three years have the potential to impact our ability to maintain public infrastructure at current levels. The City Manager has presented the City Council with. a recommended 2009 budget proposal that stays within the legal requirements. The proposed budget would fund cost of living increases for staff and the increased cost of fuel and contracted services. All remaining line items in the proposed budget are proposed at 2008 levels. Public works staff has reviewed the impact of zero increase in certain line items for the 2009 General Fund supported budget areas. As outlined below we attempt to identify where zero increase will result in significant program or operational impacts. Street Maintenance Operating Supplies -The majority of the operating supplies for Street Maintenance are petroleum based or transportation. related products. With energy-related costs increasing, we anticipate a reduction of 50% for the seal coat program necessary for a zero increase in operating supplies. Even with the requested $13,000 increase in operating supplies, we would have needed to reduce the program by 35-40% due to current price increases since our 2008 bids were received. 5ea1 coat ail. has increased from $1.30 per gallon to $2.47 per gallon today. Our hope is that prices will moderate over the next b-8 months before we bid 2009 materials, but our suppliers tell us to expect $2.50 per gallon for 2009. We would propose to keep most other programs requiring supplies at slightly reduced levels for 2009 to accommodate the reduction in quantities required for static budget dollars. The other programs impacted will be traffic si.gnage; street patching, and snow and ice control. The long-term impact of reducing seal coat program to 50% for a sustained period of time is $4-5 additional future cost for every dollar of preventative maintenance not performed today. Vehicle Supplies and Contractual Vehicle Maintenance Repair parts and contractual repairs are increasing at greater than the normal inflationary rate. These needs are driven by unpredictable breakdowns. With vehicles being retained longer rather than replaced, we are seeing additional pressure on these line items. For prompt service to residents, vehicles and equipment need to be in good working order. Contractual Street Maintenance A zero increase in this line item will impact trafFrc control pavement markings, reduced concrete curb- repair, and less. contractual pavement repair. ® Page 1