Consideration of accepting plans and specifications and authorizing bids for Improvement Project 14-01, 2014 Street Maintenance Program Phase 2.

Purpose:
The purpose of this case is to request Council acceptance of plans and specifications and authorization to advertise bids for Improvement Project 14-01, 2014 Street Maintenance Program Phase 2.
 
Background:
On April 29^th, the City Council accepted bids and awarded contracts for Division A and B of the 2014 Street Maintenance Program.  At that time, it was discussed that the bids were very favorable and that the difference between the engineer’s estimate and the low bids was approximately $116,000.  Based on recent discussions regarding the importance of maintaining the City’s aging street system on a routine basis, and the fact that the City has not been routinely maintaining its streets, Council directed staff to consider some other streets that would be good candidates for another street maintenance project to be let in 2014, and to present the project to Council for approval.
 
Staff reviewed the City streets database and identified approximately 6 miles of streets that would be good candidates for Phase 2 of the 2014 SMP.  Attached to this case is a map showing the streets included in the previously approved 2014 Street Maintenance Program, as well as the newly selected streets that are proposed to be bid as Phase 2 of the 2014 Street Maintenance Program.  Also attached are three maps (L, M, and N) that show the proposed Phase 2 streets in more detail.  These streets are all proposed to be crack-sealed and sealcoated to help protect and preserve the pavement from the negative effects of the sun, stormwater runoff, and other petroleum products that are deposited on the pavement over time by vehicles.  The same specifications that were used for the Division A (crack-seal and sealcoat) projects of Improvement Project 14-00 will also be used for Improvement Project 14-01.

No notifications were required for this case.

Observations:
The estimated total cost for all improvements identified as Improvement Project 14-01 is $156,736.  This amount is significantly more than the $116,000 of excess funds from IP 14-00.  If Council only wishes to spend funds closer to the $116,000 that was left from IP 14-00, staff recommends pulling the streets identified on Map L (Riverwood) from the project.  The estimated construction cost for the Map L streets is $29,736 which results in a total project cost of 127,000.  The estimated costs of the other two project areas are as follows; Map M (Highpoint) = $51,158, and Map N (Golden Eagle) = $75,841.  Any combination of these project areas may be bid, depending on the desired project cost.
 
Staff also reviewed options for completing one or more overlay projects in place of more sealcoating projects, but based on the streets database staff believes it will be most cost-effective to sealcoat another 6 miles of City streets than it would be to overlay another half-mile of streets.
 
Alternatives:
Alternative #1 - Motion to accept plans and specifications and authorize advertisement for bids for Improvement Project 14-01, 2014 Street Maintenance Program Phase 2.

Alternative #2 - Motion denying authorization to advertise for bids at this time.

Alternative #3 - Motion of other.

The 2014 budget includes $500,000 in the general fund for street maintenance projects. No assessments are proposed to fund any portion of the 2014 Street Maintenance Program.

Staff anticipates that bid prices will be less than the estimated costs presented above but if bids are higher than staff’s estimated costs, one or more sealcoat segments will be removed to reduce project costs to an amount equal to or less than $500,000.
 
On April 29^th it was also discussed that approximately $522,000 of funds that were budgeted for street maintenance projects in 2013 were never spent, and that these funds could be spent on street maintenance projects in 2014.  Below is a breakdown of the 2013 General Fund budget, which included $1,327,500 for street maintenance projects.  Offsetting revenues identified to support the budgeted expenditures included $275,000 from TIF 4, $244,493 from the Public Improvement Revolving (PIR) Fund, $577,500 from Engineering Revenue generated from in-house engineering design and construction staking and inspection activities on the Riverdale Drive project and other authorized road reconstruction projects estimated at $1.5M (of which only the 2013 Street Maintenance Program was completed).  The remaining $230,507 was identified to come from the General Property Tax Levy as shown below.
 
2013 General Fund Budget
Expenditures:
                                Road Reconstruction Funding-Street Maintenance Budget       $ 1,327,500
 
Revenues:
                                Tax Increment Financing District #4                                       $    275,000
                                Public Improvement Revolving Fund (PIR)                               $    244,493
                                Engineering Staff Time Revenue:
                                                Riverdale Drive                                                     $    375,000
                                                Authorized Road Recon Projects                           $    202,500
                                General Fund Tax Levy                                                         $    230,507
                                Total Revenues                                                                        $ 1,327,500
 
The Riverdale Drive project was not delivered in 2013 due to a longer than anticipated plan approval process as required by MnDOT’s Cooperative Agreements unit since they are funding a portion of the project.  Therefore, the $375,000 in engineering revenue for this project did not materialize in 2013 but will later in 2014 when the project is constructed.  The Garnet Street & 168^th Avenue Reconstruction project, which was scheduled for construction in 2013 per the 2013-2017 CIP, was not constructed in 2013 due to the ongoing discussions regarding the potential use of Franchise Fees to fund some or all of the long-term street maintenance program, which must now include street reconstruction projects such as Garnet Street and 168^th Avenue. As with the Riverdale Drive project, engineering revenue can be generated with this project once it is constructed.  Below is a tabulation of the actual 2013 year-end street maintenance activities.
 
Year End 2013 Actual Activity
Expenditures:
2013 Street Maintenance Program                                                    $    454,910
 
Revenues:
Tax Increment Financing District #4                                                 $    275,000
Engineering Staff Time Revenue:
2013 Street Maintenance Program                                                  $      75,000
Private Escrowed Projects                                                              $    152,881
General Fund Tax Levy                                                                   $    230,507
            Public Improvement Revolving Fund (PIR)                             $    244,493
Total Revenues                                                                              $    977,881
 
Excess Revenues Over Expenditures                                              $    522,971  (Transferred to PIR fund for future street maintenance projects)
 
Another funding source that is often discussed and not fully understood is our Municipal State Aid Fund. The Minnesota Department of Transportation (MnDOT) annually distributes funds through their State Aid office to cities having a population of 5,000 or more.  The purpose of these funds are to help maintain and construct the City’s Municipal State Aid Street (MSAS) system, which can include up to 20% of the total City street mileage.  The funding distribution is based on a formula determined by the Legislature and defined within State Statute 162.  In 2014, the City of Ramsey was allocated a total of $1,059,484 ($610,905 for construction and $448,579 for maintenance) for constructing and maintaining the City’s MSAS system.  The annual allocations are deposited in the Municipal State Aid (MSA) fund which is dedicated to funding various construction and maintenance projects on the City’s MSAS system.  Approximately $450,000 is currently allocated for annual bond payments for the Sunfish Lake Boulevard Improvements project (2019 bond expiration) and the Armstrong Boulevard and Bunker Lake Boulevard Intersection Improvements project (2022 bond expiration).  As these bonds expire, the previously allocated MSA funds can be applied to other projects on the City’s MSAS system.  The MSA fund annually contributes $140,000 to the General Fund budget for General Street Maintenance.  The current Riverdale Drive Extension/Reconstruction project was budgeted to be funded from the MSA fund in 2014.  The current estimated 2014 ending balance of the MSA fund is $254,000.

Staff recommends accepting plans and specifications and authorizing bids for Improvement Project 14-01, 2014 Street Maintenance Program Phase 2.

Motion to accept or deny plans and specifications and authorization to advertise for bids for Improvement Project 14-01, 2014 Street Maintenance Program Phase 2.