CC PACKET 08222006 - Laserfiche WebLink

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MEMORANDUM DATE: August 7, 2006 TO: City Council FROM: Mike Mornson, City Manager . Roger Larson, Finance Director The current agreement for road maintenance with Hennepin County expires on 12/31/2006, The agreement relates to payment for services the City performs relating to County State Aid Highways within the City limits. Those services include: snow removal;. street sweeping; mowing; flushing; and disposal of debris. Based on the rising costs of fuel and maintenance, Jay Hartman and I met with representatives from the County to request the new contract be increased significantly to include the rising costs for motor fuels, maintenance, .repairs and wages. Previously the contract included a flat annual payment that was increased by a percentage each year which had no ability to factor in escalating changes or market conditions. Hennepin County has addressed our concerns by offering payment at the same level as if they were performing the service themselves. The costs are based on a formula that takes into consideration the length of the street, the billable unit price of the machine used and the months of service, I have reviewed the financial structure of the contract and am comfortable with how the County has structured the payment schedule. It includes a fair estimate and payment of what the actual costs are associated with the maintenance of these roads.. In addition, another safety buffer in the agreement allows for changes to the billable unit price. The rate of each piece of equipment is reviewed annually and adjusted to reflect an increase in the contract payment to the City for inflationary and uncontrollable cost increases. The 2007 payment will total $24,994.00 compared to the 2006 payment of $11,314.00. Recommendation: Council approves the Hennepin County Road Maintenance Agreement for the term of 5 - years - 01/01/2007 through 12/31/2011. MA