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HomeMy WebLinkAboutJuly 19, 2010 Agenda AGENDA CITY OF DENTON CITY COUNCIL July 19, 2010 After determining that a quorum is present, the City Council of the City of Denton, Texas will convene in a Special Called Work Session on Monday, July 19, 2010 at 11:30 a.m. in the Council Work Session Room, 215 E. McKinney Street, Denton, Texas at which the following item will be considered: NOTE: A Work Session is used to explore matters of interest to one or more City Council Members or the City Manager for the purpose of giving staff direction into whether or not such matters should be placed on a future regular or special meeting of the Council for citizen input, City Council deliberation and formal City action. At a Work Session, the City Council generally receives informal and preliminary reports and information from City staff, officials, members of City committees, and the individual or organization proposing council action, if invited by City Council or City Manager to participate in the session. Participation by individuals and members of organizations invited to speak ceases when the Mayor announces the session is being closed to public input. Although Work Sessions are public meetings, and citizens have a legal right to attend, they are not public hearings, so citizens are not allowed to participate in the session unless invited to do so by the Mayor. Any citizen may supply to the City Council, prior to the beginning of the session, a written report regarding the citizen's opinion on the matter being explored. Should the Council direct the matter be placed on a regular meeting agenda, the staff will generally prepare a final report defining the proposed action, which will be made available to all citizens prior to the regular meeting at which citizen input is sought. The purpose of this procedure is to allow citizens attending the regular meeting the opportunity to hear the views of their fellow citizens without having to attend two meetings. 1. Receive a report, hold a discussion, and give staff direction regarding alternatives for transportation and economic development opportunities, which are currently being discussed in the 81st Interim Legislature and by various regional and statewide transportation stakeholders. 2. Receive a report, hold a discussion and give staff direction regarding street maintenance issues. Following the completion of the Work Session, the City Council will convene in a Closed Meeting to consider specific items when these items are listed below under the Closed Meeting section of this agenda. The City Council reserves the right to adjourn into a Closed Meeting on any item on its Open Meeting agenda consistent with Chapter 551 of the TEXAS GOVERNMENT CODE, as amended, as set forth below. 1. Closed Meeting: A. Consultation with Attorney - Under Texas Government Code Section 551.071. 1. Receive a briefing from the City's attorneys regarding legal issues related to parking and speed matters on City streets running through or adjacent to the University of North Texas and Texas Woman's University. Discuss, deliberate and provide attorneys with direction. A public discussion of these matters would clearly conflict with the duty of the City's attorneys to the governmental body under Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas. City of Denton City Council Agenda July 19, 2010 Page 2 2. Consultation with the City's attorneys regarding legal issues associated with board and commission members and conflicts of interest and the release of confidential information where public discussion associated with these legal matters would clearly conflict with the duty of the City's attorneys to the City of Denton and the Denton City Council under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas. CERTIFICATE I certify that the above notice of meeting was posted on the bulletin board at the City Hall of the City of Denton, Texas, on the day of 2010 at o'clock (a.m.) (p.m.) CITY SECRETARY NOTE: THE CITY OF DENTON CITY COUNCIL WORK SESSION ROOM ACCESSIBLE IN ACCORDANCE WITH THE AMERICANS WITH DISABILITIES ACT. THE CITY WILL PROVIDE SIGN LANGUAGE INTERPRETERS FOR THE HEARING IMPAIRED IF REQUESTED AT LEAST 48 HOURS IN ADVANCE OF THE SCHEDULED MEETING. PLEASE CALL THE CITY SECRETARY'S OFFICE AT 349-8309 OR USE TELECOMMUNICATIONS DEVICES FOR THE DEAF (TDD) BY CALLING 1-800-RELAY- TX SO THAT A SIGN LANGUAGE INTERPRETER CAN BE SCHEDULED THROUGH THE CITY SECRETARY'S OFFICE. AGENDA INFORMATION SHEET AGENDA DATE: July 19, 2010 DEPARTMENT: City Manager's Office CM/ ACM: George Campbell SUBJECT Receive a report, hold a discussion, and give staff direction regarding alternatives for transportation and economic development opportunities, which are currently being discussed in the 81ST Interim Legislature and by various regional and statewide transportation stakeholders. BACKGROUND The information herein is being provided as a preliminary introduction and support to the August 3, 2010 City Council agenda item on Tax Increment Finance Zones, and to highlight the funding alternatives that the State Legislature may extend in the 82nd legislative session to municipalities, counties and other political subdivisions of the state. Definition and Overview Transportation Reinvestment Zones (TRZ) were created in 2007 by SB 1266, 80th Legislature, and codified in Chapter 222.106 of the Texas Transportation Code. The statute authorizes municipalities and counties to dedicate a portion of property tax revenue to finance highway projects. The primary objective of a TRZ is to promote a transportation project in an unproductive or underdeveloped area. Other purposes enumerated under Section 222.105 of the Texas Transportation Code include: promote the public safety; facilitate the development or redevelopment of property; facilitate the movement of traffic; and enhance a local entity's ability to sponsor a project authorized under Section 122.104, the pass-through financing statute. The language does not currently define the radius of a proposed zone. In order to be eligible for a TRZ, cities must enter into a pass-through agreement with TxDOT. Projects are limited to on-system TxDOT roadways. Pass-through toll projects mandate the state reimburse the entity responsible for up-front project costs (including design, development, financing, construction, maintenance, or operations), based on a "per vehicle fee or a per vehicle mile fee, that is determined by the number of vehicles using a highway" (Sec. 222.104, Texas Transportation Code). The governing body will then create a tax increment account, into which an amount equal to the tax increment from properties within the zone will be deposited. One-hundred percent of the funds must be used for financing and reimbursement of pass-through projects. Counties may use funds toward tax abatements (as codified in Chapter 222.107 of the Texas Transportation Code), but municipalities are not authorized to do so. Transportation Reinvestment Zone (TRZ) vs Tax Increment Reinvestment Zone (TIRZ) As discussions begin in the legislature regarding alternative financing of transportation projects, it may be easy to interchange the terms TIRZ and TRZ. A TIRZ, or Tax Increment Reinvestment Zone, is also referred to as a TIF, or Tax Increment Financing, as codified in Chapter 311 of the Texas Tax Code. The term "TIF" will be used for purposes herein. A key difference between a TRZ and TIF, is that roadway- related projects are explicitly limited to highways in a TRZ, whereas roadway projects in a TIF are referred to as the non-limiting term "streets." Additionally, a TIF authorizes municipalities to dedicate a portion of the property and sales tax increment to fund infrastructure improvements, whereas the TRZ requires that one-hundred percent of the tax increment of property taxes goes to fund the on-system road project. Finally, the boundary of a TIF must remain inside the city or county limits and must be designated by the governing body creating the reinvestment zone, while a TRZ boundary is determined by the Texas Transportation Commission (TTC) and is not given a specified allowable radius. Transportation Investment Act The Transportation Advocates of Texas, Inc (TATI), formerly the Texas Transportation Coalition and Statewide Transportation Advocates, a consortium of North Texas and statewide transportation stakeholders including elected officials, municipal staff members, and legislative consultants, is drafting the latest version of the local option bill known as the Transportation Investment Act (TIA), which was previously known as the Texas Local Option Transportation Act(TLOTA) in the 81ST Legislature. TRZ language is not yet incorporated in the TIA draft. However, the TRZ is a component of the TATI agenda for the 82nd legislature, and may soon be considered for the TIA as the following: "Expand the ability to use reinvestment zones to fund transportation; authorize cities and counties to capture the growth increment in local property taxes and/or local sales taxes for investment in transportation projects" (Exhibit 2). City staff continues to monitor activities of the TATI and any developments that may impact the City of Denton. Interim Legislative Committee Consideration of TRZ The Senate Transportation and Homeland Security Committee has been given the interim charge of reviewing the "policy implications of transportation reinvestment zones funded by state sales and use taxes as an alternative to public financing of transportation projects" (Senate Standing Committee Interim Charges, 81ST Legislature). As you will find in the information below, the current TRZ legislation may be amended to authorize municipalities and counties to dedicate the sales tax increment, in addition to property tax increment, within the zone and to include all transportation projects by eliminating the pass-through limitation. The intent of the legislation would then be to expand the project criteria to include all forms of transportation, including non-TxDOT roadways and rail. Proposed Legislation to Monitor The latest legislative attempt to authorize the collection of sales tax within a designated zone for purposes of funding a transportation project is found in SB 505, introduced by Senator Ogden in 2009 during the 81ST Legislature (Exhibit 3). SB 505 passed the Senate, was voted favorably from the House Transportation Committee, but did not make it to the House floor. The bill would have given the Texas Transportation Commission authority to designate an area adjacent to a state highway project as a Transportation Finance Zone (TFZ), and authorizing the revenues from the state sales and use taxes imposed in the zone to be deposited in a revolving fund and used to repay financial assistance provided from the fund for toll or non-tolled highway projects. The key point to keep in mind regarding this proposed legislation is that the designated area could have extended more than two-miles on either side of the center line of a state highway. The House Committee on Transportation and Senate Committee on Transportation and Homeland Security held a joint hearing on February 1, 2010 to consider the interim charges for the 82nd Legislature in 2011, discussed above. Members received testimony regarding SB 505 and may consider resurrecting this bill or using the foundation of the bill to influence any modifications to the TRZ legislation. Specifically, the Committee addressed the option of expanding the TRZ language to include all transportation projects, including off-system roadways and rail, and authorizing the collection of local sales taxes in addition to local ad valorem taxes. This discussion took place as the result of recommendations originating from the TATI proposed legislative agenda. It is currently unknown if an additional political subdivision of the state, other than cities or counties, would be authorized to create a TRZ that may overlap an existing TIF, thereby reducing or eliminating the taxing authority of the governing body of the TI F. SUMMARY In summary, below are the highlights of the concerns staff has of extending authority to other political subdivisions of the state, in addition to the currently authorized entities: • A de facto revenue cap may be imposed on the city. Were another political subdivision of the state, other than cities and counties, granted authority to create a TRZ within the jurisdiction of the city, and consequently were also extended the authority to collect the incremental local sales and/or property tax that fell within the designated zone, this would act as a de facto revenue cap on the city, limiting the city's ability to collect sales and property tax. • Overlapping zones may be created. It is possible that another political subdivision of the state could be given authority to create a TRZ that overlaps an existing TIF. • Undedicated funds may be diverted to a separate governing entity. It is not clear, that if a TRZ were created by another political subdivision of the state that overlapped an existing municipal TIF, if funds that have not been dedicated to the project costs of the designated TIF could potentially go to the governing body of the overlapping TRZ, thereby reducing the tax base of the TIF governing body. • The TRZ legislation may be modified to include a 2-mile radius. Again, it is possible that if another political subdivision is given authority to create a TRZ, they would be able to capture sales and property tax base within a 2-mile radius of the project. RECOMMENDATIONS Staff recommends the Council oppose any legislation that would extend the TRZ as a financing tool to any additional political subdivisions of the state, other than cities and counties. EXHIBITS 1. Table: Alternative Funding Options 2. Transportation Advocates of Texas, Inc. Legislative Agenda 3. Senate Bill 505, 81ST Legislature Respectfully submitted: Marls Nelson Director of Transportation Prepared by: Lindsey Balser Assistant to the City Manager N 4-1 o o c 4, - o a~ > 4~ X 0 C: tO 4,-J Q m u a) O O O C OC 4~ M C V) O O 4O+ rj -6 N O L } (1) L p O C C +m N O 4- L Q Q b.0 L s 4-' C: 4- a~ 4, M 4- a~ E o C p 4- a) C O - Q-0 O N O N U O to d CA a n Z Q L to D 'VI Q J N U s 4- i X in O N C C 0 0 U a) O O V) 4~ 0 V) a~ N 0.0 '+o > C C 7 - i n L - L - a) C Q a) bA C O (n Q C L M O -O (0 J -p in V) 4~ O m ~ 4- aO+ C V L 0 C o (6 41 h0 N O to by O 00 a) (6 O cn N C Q o n5 ~ L E h.0 E -2 Q •U a) -6 C z m E o s C M- 0-0 a- E s °n x O U a s ~ Lr) m a L'/) N s m e bio CC H Q 4~ v) O a) ° u m o d O to N X + (n L a) Z Q Q a- O 0 4- Q C O (6 O Q 4 0 O O a) a) s o L oo c- 4- 4- > > by c -O N in W - f6 a) 4- Q N 7 b.0 O N C m O i u p 7 O •in C N to Q v+ O Q 'O O U * -O } v • C C E V) C i a) Q N ? s W U d L C O O o C O s N O ~ a., 7 J c-I Q d O s Z U U J Q O C a) N > x CD C Ul) M- E C o in CL x E> N m = i -O • C CD X 1 a; O E C W > C > X a) -0 L L -0 no O L a) r -a E U Ln a) .c L ~ > Q) tw U 0 0 L a •uo O0 m > E a n c 4-1 O > - - > U s 'C C a) U ago } s o c~ O U a) o o a`) -u L E co C U W L J J d d Ln _ U U * TRANSPORTATION ADVOCATES OF TEXAS, INC. Working to increase state resources for funding transportation projects and provide Texans the means to access local revenue for transportation to maintain mobility, enhance connectivity, avoid gridlock, serve population growth, preserve existing infrastructure, and sustain the Texas economy • Moving people and goods safely and efficiently requires a large, on-going investment. • Current transportation revenues are too low to fund Texas' priority transportation needs. • Costs to maintain Texas roads are rising because the roadways are aging and the proportion of heavy truck traffic is increasing. • To sustain its economy and quality of life, Texas must invest more in statewide connectivity, roadway maintenance, and added transportation system capacity to serve its growing population (By 2035, Texas will add 15.6 million residents, growing by 61%.). • Poorly maintained roads cost Texas motorists on average $336 a year in unnecessary vehicle repairs. • Texans spent $6.7 billion in wasted time and fuel costs on congested roadways in 2007. • Beginning in 2012, there is no new money for added roadway capacity in Texas... maintenance costs of the existing system will consume all available funding... roadway congestion and delay will grow worse. Goal: Pass 4 bills and 1 joint resolution to provide revenue to fund transportation Bill #1: The Transportation Investment Act - Diversions / Indexing / Rate Increase / Local Option Authority • Stops the diversion of transportation resources over time • Indexes the state tax on gasoline and diesel fuel to stop the erosion of purchasing power • Increases the rate of the state tax on gasoline and diesel fuel by ten cents per gallon and allocates the revenue to the TxDOT districts by formula to fund needed road, rail and transit projects • Authorizes counties to hold local option elections so that their citizens can vote to decide if they want to pay to fund specific transportation projects with a mobility improvement fee and /or a county motor fuel tax... much like a local bond election Joint Resolution: Constitutional authority to implement the Transportation Investment Act Amends the Texas Constitution to permit the Comptroller to adjust the rate of the state tax on motor fuel annually (indexing), phases out DPS funding with gas tax and vehicle registration fee revenues (diversions), authorizes a voter-approved county motor fuel tax and vehicle registration fee to fund road, rail and transit projects, and allows revenue from the new ten cent state motor fuel tax to fund rail and transit as well as roads (DRAFT Transportation Investment Act - bill and JR - is at www. ntc-dfw. orgltransportation) Bill #2: Reinvestment Zones for Transportation Expand the ability to use reinvestment zones to fund transportation; authorize cities and counties to capture the growth increment in local property taxes and/or local sales taxes for investment in transportation projects Bill #3: County Toll Authorities Authorize counties to establish a county toll authority or to join with adjacent counties in a regional toll authority Bill #4: Public Private Partnerships / Comprehensive Development Agreements Restore authority to use public private partnerships and comprehensive development Agreements to fund transportation projects Important Dates Going Forward November 8, 2010 Prefiling of legislation for the 82nd session begins January 11, 2011 82nd Legislature convenes at noon May 30, 2011 82nd regular session ends TAKE ACTION: How to contact your State Senator and Representative Tell YOUR Senator and Representative All elected officials are available via phone, personal letter, and e-mail 1. We have a transportation problem To find out who represents you in the Texas Senate go to: 2. You need to solve it http://www.senate.state.tx.us/75r/Senate/Mernbers.htm#fFYI 3. I'm willing to pay for the solution or call 512.463.0100 To find out who represents you in the Texas House of Representatives go to: http://www.house.state.tx. us/members/welcome.php or call 512.463.1000 By: Ogden S.B. No. 505 A BILL TO BE ENTITLED AN ACT relating to authorizing the designation of an area adjacent to a state highway project as a transportation finance zone, and authorizing the revenue from the state sales and use taxes imposed in the zone to be deposited in a revolving fund and used to repay financial assistance provided from the fund for highway projects. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Subchapter A, Chapter 222, Transportation Code, is amended by adding Section 222.005 to read as follows: Sec. 222.005. TRANSPORTATION FINANCE ZONES. (a) The commission by order or resolution may designate as a transportation finance zone an area that is adjacent to the right-of-way of an existing or proposed state highway project and within two miles on either side of the center line of the state highway. The area designated as a transportation finance zone may extend more than two miles on either side of the center line of a state highway if necessary, as determined by the commission, to avoid the splitting of a location in which the sale, storage, use, or other consumption of a taxable item would be consummated. Each transportation finance zone shall be designated by the commission with a separate number or name. (b) The designation of a transportation finance zone is not Page - 1 - S.B. No. 505 effective until the Legislative Budget Board has reviewed and approved the designation and boundaries of the zone. (c) Notwithstanding Section 151.801(a), Tax Code, proceeds from the collection of the taxes imposed by that chapter in connection with a sale, storage, use, or other consumption that is consummated in a transportation finance zone shall be deposited in the Texas Transportation Revolving Fund or similar revolving fund authorized by law, to be used for the repayment of financial assistance provided from the revolving fund for highway projects as provided by law. (d) The proceeds from the collection of taxes deposited to the credit of a revolving fund under Subsection (c) may only be used for the repayment of financial assistance provided to the department for tolled or nontolled highway projects within the transportation finance zone in which the taxes were collected, and may not be used to provide financial assistance for a project developed, constructed, or operated by a private entity under a comprehensive development agreement. (e) In any state fiscal year the comptroller may not deposit more than $250 million to the credit of a revolving fund under Subsection (d). (f) A transportation finance zone terminates on the earlier of: (1) the termination date, if any, specified in the order or resolution designating the zone; or (2) the date on which the financial assistance secured Page -2 - S.B. No. 505 by proceeds from the collection of taxes imposed within the zone has been repaid. (g) The commission shall adopt rules to implement and administer this section. SECTION 2. (a) Except as provided in Subsection (b) of this section, this Act takes effect January 1, 2010, but only if the constitutional amendment authorizing the legislature to permit the Texas Transportation Commission, subject to the review and approval of the Legislative Budget Board, to designate the area adjacent to a state highway project as a transportation finance zone and authorizing the revenue from the state sales and use taxes imposed in the zone to be deposited in a revolving fund and used to repay financial assistance provided from the fund for transportation projects is approved by the voters. If that amendment is not approved by the voters, this Act has no effect. (b) The comptroller of public accounts may not deposit any funds to the credit of a revolving fund under Section 222.005, Transportation Code, as added by this Act, until September 1, 2012. Page -3 - AGENDA INFORMATION SHEET AGENDA DATE: July 19, 2010 DEPARTMENT: Water Utilities ACM: Howard Martin, Utilities 349-8232*'__- SUBJECT Receive a report, hold a discussion, and give staff direction regarding street maintenance issues. BACKGROUND Responsibility for Streets/Traffic operations and maintenance were transferred to the Water Department in 2001. Funding for these two divisions continues to be provided from the general fund. Staff would like to update the City Council on historical street maintenance issues, the current maintenance activities and provide staff recommendations on the changes needed to adequately operate and maintain the street system. The City contracted with ERES Consultants in 2003 to perform an automated pavement evaluation. This evaluation gave staff an assessment of the Overall Condition Index (OCI) of the City of Denton street network. Based on the analysis of the road condition, the consultant performed model nuns to determine the level of expenditure necessary to prevent the deterioration of our roadway system. (Exhibit 1) The 2003 pavement study provided an initial baseline which we will use to measure our progress with the street maintenance program. In the fall of 2009 we initiated the second automated pavement assessment project. We have contracted with Infrastructure Management Services (IMS) to perform the automated pavement evaluation. The consultant is finalizing the analyses to determine the maintenance activities necessary to prevent the deterioration of the road system. We have received draft information from the consultant that has allowed us to compare the OCI from the 2003 study with the 2010 study. The 2003 OCI value was 69 compared with an OCI of 56 for the 2010 study. Based on this comparison the data indicated that the OCI value for the city has continued to decline. The 2003 automated pavement study indicated that to prevent the reduction of the OCI we should be spending 18 million dollars annually. Since the 2003 automated study we have spent a total of 28.5 million on OCI improvements. This total expenditure averaged approximately $4.75 million per year. We will bring back the results of the automated assessment as soon as the project is finalized. Staff has provided a 15-year expenditure history for street maintenance activities (Exhibit 2). Costs of utility patches and pothole repair are included in these totals, when calculating the annual replacement costs these expenses should not be included in the maintenance expenditures. Maintenance activities impacting the OCI values include; crack-seal, micro-seal, hot-mix asphalt (HMA) overlay, and street reconstruction. The crack seal program involves the application of rubberized asphalt material into cracks that appear on the surface of the roadway. This is a very important early maintenance procedure to prevent moisture from seeping into the cracks. This prevents damage from the freeze thaw cycles in the winter and from expansion/contraction cycles due to the expansive clay soils under the pavement. Micro-seal is a more aggressive maintenance procedure providing a thin additional wear surface and a sealant coating to the surface of the roadway. This material is comprised of rock, emulsion asphalt, cement, and sand. This procedure seals the entire surface of the roadway protecting the roadway and subgrade from moisture. Smaller cracks and more numerous cracks are more cost effectively sealed using this maintenance procedure. Hot-mix asphalt overlay (HMA) involves the milling of several inches of asphalt off of the surface of the roadway and then replacing with three to four inches of hot-mix asphalt and then roller compacting. Spot curb and gutter repairs are normally made during this procedure. Total reconstruction involves the complete removal of the existing roadway and reconstructing of the subgrade and placement of new asphalt layers or concrete. Normally, on a total reconstruction project the curb and gutter sections were either partially or completely replaced. Coordination of capital improvement efforts between the City of Denton's Water, Wastewater, and Streets divisions is extremely important in order to minimize conflicts, control costs, eliminate multiple mobilizations to the same project locations, and to avoid disturbances to recently rehabilitated/replaced facilities by other projects. Recently, staff implemented an approach for the coordination of these efforts. Water Utilities collects data on water main breaks per mile in a database that allows them to evaluate the water lines that have the largest number of breaks and prioritize them for replacement/rehabilitation. From this data, a five year replacement program is generated as part of the Utility CIP that lists the size and extent of line to be replaced, as well as the fiscal year for the replacement. Based on this schedule of projects, the Wastewater Utilities division evaluates the possible wastewater collection line replacements needed in the same locations, at times performing additional analyses and testing in order to evaluate the integrity of the wastewater lines. The status of the wastewater lines was added to the water line replacements spreadsheet, characterizing the type of repair or replacement in each instance. The next step in coordinating the various CIP projects is to incorporate scheduled street rehabilitation projects into the spreadsheet in priority order, including the project extents and the overall condition index (OCI) rating. The Streets division will submit their replacement list for the five year CIP based on the streets listed that coordinated with water and/or wastewater projects and have a low OCI rating. The goal for all of the divisions involved was to better coordinate all the CIP projects and develop a system with which would maximize the life cycles of all assets. Annual Replacement Costs A life cycle cost chart was prepared to give an estimate of the annual expenditures necessary to maintain a given number of lane miles (Denton has approximately 1382 lane miles) of roadway (Exhibit 3). Roadway standards prior to the 2002 would yield approximately 20 year life cycles. By looking at the 20 year life cycle costs and assuming a cost of $300,000 per lane mile, it indicates we need to be spending $20.7 million dollars per year for annual maintenance. Our current standards for roadway constriction should yield a 35 to 40-year life cycle. Improving the life cycle to 35-40 years reduces the annual maintenance expenditures to $13 to $15 million per year. It is apparent from the annual replacement costs that by increasing the life cycle of our roadways the annual maintenance costs can be significantly reduced. Staff has surveyed other cities in the Metroplex to determine how our roadway design standards compare (Exhibit 4). With the exception of major and minor arterial categories, our design standards are comparable. The arterial category design standards have been raised to handle higher traffic volumes and heavier trick loads. Denton Street Maintenance Program Over the past 5 years we have spent approximately $4.75 million per year on street improvements. We have $2 million left from the last CIP program. Once we have expended the CIP dollars we drop back to an annual expenditure of $2.5 for OCI improvements. However, based on the Automated Roadway Evaluation additional resources need to be programmed for street maintenance to reverse the overall deterioration of the street network. This situation has developed over several decades and has resulted in an overall deterioration of the street network. Unless major changes in the street maintenance program are made soon, the street system will deteriorate to an unacceptable level and reasonable options for addressing the issue may not be available. A financial plan must be developed to reverse the current trend and restore the street program to a viable level. Based on the large size of this funding gap, easy financial solutions will not be available. The financial plan must consist of a number of sources of additional funding and a prioritization of existing funding sources to be successful. The plan will also require a number of years to fully implement. We have included the proposed funding needs based on the 2003 model. (Exhibit 5). Staff will bring back the final results of the 2010 automated pavement project with funding recommendations. At this time, staff will discuss funding options with Council and seek guidance on how to provide for the funding shortfall. In other areas of the county failure to adequately fund streets maintenance programs are forcing the agencies to look at other paving alternatives. (Exhibit 6) EXHIBITS 1. Change in Network OCI 2. Historical Expenditures 3. Annual Street Replacement Cost 4. Design Criteria for Surrounding Municipalities 5. Program Funding Need vs. Proposed 6. Lansing Michigan 7. 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