HomeMy WebLinkAboutResolution 4507 public hearing, funding of Street Reconstruction Projects
Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Rick Hixson, City Engineer
Craig Woolard, Director of Public Works SUBJECT: Adoption of Resolution 4507 - Establishing goals and policies for
the funding of street reconstruction projects including establishing a fixed percentage for street
reconstruction to be paid for by the creation of a special improvement district based on street
functional classification. AGENDA ITEM TYPE: Action
MEETING DATE: February 3, 2014
RECOMMENDED MOTION: I hereby move to adopt Resolution 4507 establishing goals and policies for the funding of street reconstruction projects.
KEY ISSUES: In 2010, the Bozeman City Commission created the Street Reconstruction Fund
for the purpose of reconstructing primarily local city streets which could no longer be maintained using standard street maintenance procedures of patching, chip sealing, and milling and overlaying. This fund was most recently used to finance the reconstruction of South 8th Avenue,
a city collector street. The funding formula used for that project was 87.3% reconstruction fund
and 12.7% local contribution through creation of a Special Improvement District (SID). Moving
forward there are many streets which need to be reconstructed that do not have the same level of community use as South 8th Avenue. A policy specifying how these projects will be funded will facilitate street improvements.
At the December 16th, 2013 City Commission meeting, staff asked for direction from the
commission on the allocation of street and curb reconstruction and special improvement district funding for upcoming projects. The commission heard background on street funding sources, listened to staff recommendations and directed staff to return with a suggested policy which
incorporated their comments. This memo:
Summarizes the commission’s input from the December 16, 2013 Commission meeting; and
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Introduces and discusses proposed Commission Resolution No. 4507, which establishes a
suggested policy for determining the funding allocations for street reconstruction projects.
RECOMMENDATION: Adopt Resolution No. 4507. Adoption of the Resolution as written will establish the funding split between local and non-local funds to be allocated for street reconstruction projects.
BACKGROUND: On December 16, 2013 the City Commission met with Public Works staff to discuss local street funding options. We provided background information on the potential
sources of funding for street improvement projects and made three recommendations:
1) Allocate $50,000 per year of the curb reconstruction funding to repair and
replacement projects. These funds would be used to conduct spot repairs/replacements on curbs on streets not in need of reconstruction.
2) Combine the remainder of the curb replacement funds with the street reconstruction
fund to be used to reconstruct a complete street (curb to curb). These funds would be
allocated based on the condition of the street as determined by the Pavement Condition Index (PCI).
3) Establish a fixed percentage of funding for local street reconstruction allocated to a
special improvement district (SID) based on street use. Staff proposed that 75% of the
costs of street reconstruction (including curbs) be paid by SID assessments and the remaining 25% be paid from dedicated street and curb reconstruction money.
The Commission agreed with the first and second of the proposals above, but had a number of
comments and questions regarding the third recommendation. One of the primary concerns with
a fixed percentage allocation for local streets was the observation that some streets which are technically considered local in the City's transportation master plan actually carry far more than
just local traffic. Examples include Arnold Street, Hunters Way and Olive Street just to name a
few. The Commission suggested that there should be more categories than just local, collector
and arterial when determining how to fund street reconstruction.
We agree and suggest the City use traffic volume on a street (as measured by the average daily
traffic (ADT) for purposes of determining the SID share of reconstruction costs as opposed to
relying strictly on the functional classification of the street in the current transportation master
plan. (As an aside, the commission has authorized the expenditure of funds to update the
transportation master plan and we feel this will be a good time to consider refining the city's street functional classification). While not a perfect measure, using ADT to classify streets for
funding serves as a fair and rational method for allocating costs. We suggest the following
funding classifications:
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Funding Classification Average Daily Traffic
(vehicles per day (VPD))
Funding Split
(SID/Reconstruction fund)
Local Up to 800 75%/ 25%
Minor Collector 800 - 1500 50% / 50%
Major Collector 1501 - 4500 15% /85%
Arterial Over 4500 100%
Streets which are already classified as collectors or arterials in the current transportation master
plan will retain those designations irrespective of their current ADT. For example, traffic counts
for Durston Road west of Cottonwood (currently classified as an arterial) in the last transportation plan were 1,100 vehicles per day (VPD). Based on this volume, Durston would be
minor collector but at its planned capacity Durston will function as an arterial street.
The proposed traffic volumes used to establish the classifications are consistent with the City’s
existing transportation policies and plans. Setting an upper limit of 800 vehicles per day (VPD) for a local street classification is consistent with the City's current traffic calming program.
Traffic calming is frequently requested as a result of cut-through traffic. In other words, at
greater than 800 VPD, local streets are carrying more traffic volume than would be expected for
a typical local street.
We are suggesting that 25% of the local street reconstruction cost be paid for with general street
reconstruction funds. Although local streets carry almost exclusively local traffic, they do
provide an overall benefit to the network at large. For example, if an adjacent street is closed for
an accident or utility installation, the best alternative for a short period of time may be the local
street in question. A well gridded transportation network benefits the community as a whole and that is why we are suggesting that 25% of the cost be borne by the community at large.
We suggest creating a minor collector category to capture the streets in town like Ravalli Street
or Annie Street that function as neighborhood collectors. We are suggesting a 50-50 split for
these streets based on traffic counts. A range of 800 VPD for the local traffic on the low end and 1500 VPD on the high end suggests that roughly 50% of the traffic volume is local and 50% non-
local.
Major collectors are streets like South 8th Avenue or Olive Street. Again, the counts suggest that
roughly 15% of the traffic is local and 85% is due to the community at large (800/4500 ≈ .15). A 15% SID and 85% street reconstruction fund split would be equitable and is consistent with the
funding split used for South 8th Avenue.
Arterial streets are of community-wide importance and hence should be 100% funded by the
street reconstruction fund or one of the other community-wide funding sources like urban funds or gas tax funds. Failure of arterial streets will reduce the level of service of the entire network.
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The city does not currently do routine periodic counts of the traffic volumes on local streets. The
Montana Department of Transportation does periodic counts of those streets under their
jurisdiction. In those cases where traffic counts are needed the City Engineering Division can
conduct them.
RESOLUTION 4507: These guiding principles were used to draft Commission Resolution
4507. Section 1 (Goals) formalizes the Commission's desire to adopt a transparent and equitable
means of funding street reconstruction projects.
Section 2 (Policies) establishes the specific funding categories and financing allocations to be
used for street reconstruction projects. It incorporates the above table and states that the City's
preferred method of generating the local share is through the creation of an SID or payback
district.
It is important to emphasize that Resolution 4507 does not prescribe the methodology used to
determine an individual property owner’s assessment for the SID share of a street reconstruction
project or predetermine the final assessment for a property. Under Montana law, the City may
assess the “entire cost of the improvement against benefitted properties…” Sect. 7-12-4163(1),
MCA. Resolution 4507 provides an equitable allocation of the entire cost of a project between benefitted properties which include all properties throughout the City (on behalf of all users of
the system) and the residents who are directly benefitted by the improvement. As such, at the
time of creation of a SID to fund the percentage called for in Resolution 4507, the City will
determine which assessment methodology is to be used and, based on the costs of the project
allocated to the SID, the assessment for each property subject to the SID.
UNRESOLVED ISSUES: The primary unresolved issue is what to do if the residents of a
proposed SID or payback district successfully protest its creation. Ultimately this could result in
numerous local streets falling into such disrepair that a disproportionate amount of traffic would
be forced onto the adjacent streets, hastening their deterioration and increasing maintenance costs.
A method needs to be found to insure the overall health of the network, which, much like our
own vascular system depends not only on the veins and arteries, but on the capillaries as well.
FISCAL EFFECTS: If the Commission were to adopt Resolution 4507and individual lots were
to be assessed for an SID based on for example, street frontage, then for a typical residential lot
with 50 ft. of frontage on a typical local street, the estimated assessment for a street
reconstruction would be calculated as follows:
[($250/ft.(the estimated per foot construction cost for a local street)/ (2)(lots on each side of the
street)] x
(50ft)(a typical residential lot frontage on a local street) x (0.75)(the SID % recommended)=
$4,688.
A 5% SID administration cost would be added resulting in a total assessable cost of
approximately $4,922.
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These costs could be financed over 20 years. At the current estimated interest rate of 4.5%, a
typical residence would be assessed approximately $375 per year; equivalent to $31.25/month. In addition, Street and Curb Reconstruction money would provide 25% of the costs of these
projects; the portion not funded with SID’s.
Other alternatives besides street frontage could be used to calculate assessments.
ALTERNATIVES: As suggested by the City Commission.
ATTACHMENTS: Resolution 4507
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Page 1 of 3
COMMISSION RESOLUTION NO. 4507 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN,
MONTANA, ESTABLISHING GOALS AND POLICIES FOR THE FUNDING OF
STREET RECONSTRUCTION PROJECTS INCLUDING ESTABLISHING A FIXED PERCENTAGE OF FUNDING FOR STREET RECONSTRUCTION TO BE PAID FOR BY THE CREATION OF A SPECIAL IMPROVEMENT DISTRICT BASED ON STREET CLASSIFICATION.
WHEREAS, the City of Bozeman is committed to addressing the community’s
expressed needs and desires for services; and
WHEREAS, the City of Bozeman is committed to meeting those desires and demands
for services in a fiscally responsible manner; and
WHEREAS, the City of Bozeman is committed to meeting those desires and demands
for services in a manner which recognizes the fiscal and legal interests of all of the system users
now and in the future and not a limited subset of users; and
WHEREAS, the City of Bozeman has developed and adopted a long range
transportation facility plan which examined current and future needs and provides a lawful,
logical, balanced, operationally sound, and cost effective basis upon which to maintain and
develop the City’s transportation system; and
WHEREAS, There is a need to allocate funding for the reconstruction of streets in the
City; and
WHEREAS, The City Commission wishes to allocate the costs of street reconstruction
equitably among all of the users of the network;
NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of
Bozeman, Montana to wit:
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Resolution 4507, Funding of Street Reconstruction Projects
Page 2 of 3
SECTION 1
GOALS
The following goals are hereby established for the consideration of the financing of street
reconstruction projects in the City of Bozeman:
1. It shall be a goal of the City of Bozeman to invest street reconstruction funds efficiently
and equitably by:
A. Providing an equitable basis for street reconstruction funding by defining the city's
transportation network functional classifications;
B. Establishing Street funding categories and allotments for the purpose of determining
both the local share and the community share of street reconstruction project costs. Insofar as
possible, these categories will be congruent with the city's transportation network functional
classifications;
C. Average Daily Traffic volumes used for the street reconstruction program in no way
reduces the expected and planned capacities described in the long range transportation plan.
SECTION 2
POLICIES
The following policies are hereby established for street reconstruction project financing
in the City of Bozeman.
1. The following street funding categories and allocations are hereby established for
the city's transportation network:
Street Funding Classification Average Daily Traffic
(vehicles per day)
Funding Split
(SID/Reconstruction fund)
Local Up to 800 75% / 25%
Minor Collector 800 - 1500 50% / 50%
Major Collector 1500 - 4500 15% / 85%
Arterial Over 4500 100%
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Resolution 4507, Funding of Street Reconstruction Projects
Page 3 of 3
2. The local share of a street reconstruction project shall be paid for using funds
other than the City's Street Reconstruction Fund, the City's Urban Fund Allocation or any
other general obligation fund. The City's preferred method of generating the local share
funds is a Special Improvement District (SID) or, if applicable, a Payback District.
3. When recent traffic counts for a street eligible for reconstruction are unavailable,
the City Engineering Division will perform counts to establish the Average Daily Traffic.
4. Street Reconstruction projects to be undertaken will be prioritized using a
combination of the City's Street Pavement Condition Index (PCI) and traffic volumes.
5. Both the project to be undertaken and the financing allotments to be used will be
reviewed and approved by the City Commission at the time of the adoption of the Street
Capital Improvement Plan.
6. The City Commission has the discretion to establish the funding allotments to be
used in street reconstruction projects in the best interest of the community.
PASSED AND APPROVED by the City Commission of the City of Bozeman, Montana,
at a regular session thereof held on the 3rd day of February, 2014.
__________________________________
JEFFREY K. KRAUSS Mayor
ATTEST:
________________________________________
STACY ULMEN, CMC
City Clerk
APPROVED AS TO FORM:
___________________________________
GREG SULLIVAN City Attorney
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