Agenda Packets - 1985/10/28 - Laserfiche WebLink

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MEMO TO: Clerk -Administrator and City Council FROM: Director of Public Works/Community Developmen'" DATE: October 17, 1985 ��^^�� SUBJECT: STREET MAINTENANCE AND CAPITAL IMPROVEMENT The City has contingency reserves for water system maintenance and capital improvement and for sewer system maintenance and capital improvement. The City altiu has contingency reserves for revenue shortfalls. At the present time, the City budgets every year for street main- tenance. The City does not budget for street capital improvement or replacement. At some point in the future the City will be faced with spending money to replace some of the streets. In other words, at some point in time the streets will wear out and additional maintenance work will not be cost-effective. There- fore, when street maintenance is not cost-effective on a street, then the street should be torn up and replaced. The same thing happens for water, sewer and storm sewer systems. Therefore, I propose setting up a fund entitled, "Contingency Reserve for Street Maintenance and Capital Improvement". I propose that the initial balance in this account come from the 1985 Street Maintenance Budget. Expenses for street maintenance in !985 are less than the budget amount because we combined street maintenance work with the M.S.A. 1985 Street Improvement Project on Quincy Street and because the contractor's bids were very competetive, hence the unit prices were low. The amount of money that could be allocated to the contigenc, reserve for street maintenance ana capital improvement will he known once the contractor, H 6 S Asphdlt Company, submits their final bill@ RECOMMENDATION: 1 recommend starting a fund entitled "Contin- gency Reserve for Street Maintenonce and Capital improvement". The interest from this fund, and sometimes the principal from this fund could be used for future street maintenance and capital improvement. one of t'ie benefits of this fund is that by using the interest. from this fund, or a portion of interest, for street maintenance each year, additional monies will be freed up from the General Fund for other General Fund purpose;. Also, the Cicy will have a source of funds to reconstruct itreets when that harnmes nereeeAry in the fnt„r- sWT/bac 1 60 S�tr,od��%n a iz��S C oA rr„1 a