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13 MEMORANDUM DATE: August 30, 2011 TO: City Council FROM: Jay Hartman, Interim City Manager Roger Larson, Finance Director ITEM: HENNEPIN COUNTY ROAD MAINTENANCE AGREEMENT The current 5 -year agreement for road maintenance with Hennepin County expires on 12/31/2011. The road maintenance agreement outlines the 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. Hennepin County offers payment at the same level as if they were performing the service themselves. The payment for services is based on a formula that takes into consideration the length of the street which is then multiplied by a billable unit price. The billable unit changes each year based on the costs incurred by Hennepin County using a selected sample of Urban County State Aid Highways. This type of agreement provides for a safety buffer that allows for changes to the billable unit price if costs increase or change. In addition, the rate of each piece of equipment is reviewed annually and if necessary is adjusted to reflect an increase in the contract payment to the City for inflationary or increased maintenance costs. This agreement is in the same format as the previous 5 -year agreement (2006 — 2011). The payment has escalated since 2006 when the annual payment totaled $24,944 compared to a 2011 payment that totals $29,854. Based on our review, we are in agreement that the road maintenance agreement between the City of St. Anthony and Hennepin County represents a fair method of payment that is based on what the actual costs are associated with the maintenance of the roads. Recommendation: Council approves resolution d#11-053 authorizing the Mayor and Interim City Manager to execute the agreement between Hennepin County and the City of St. Anthony for Road Maintenance services for the term of 5 -years (01/01/2012 through 12/31/2016).