Item C: Funding Crest Drive/Friendly Street/Storey Boulevard Improvements

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appropriated in FY09 in the Pavement Preservation Program. Using a portion of this funding for the proposed Crest Drive, Storey Boulevard and Friendly Street improvements would mean less funding of pavement preservation projects to address the more than $170 million backlog on the improved street system. Facility Reserve – This fund was established to set aside funds for the eventual replacement of City Hall. The fund has a balance of slightly more than $23 million. The City Council has indicated an intention to use $1 million of this balance for pothole work in FY10. The balance has been earmarked for the City Hall master plan project. Use of this reserve for other projects means that either the City Hall master plan projects would need to be scaled back due to less funding, or the City Council would need to ask voters for additional funding for the project. Delayed Assessment Fund – This fund was established to provide interim funding for street assessments for partially or undeveloped large lots. At the time of development of the lot the assessment is due from the property owner and the fund is reimbursed with the payment of the assessment. There is approximately $700,000 available in this fund. Use of this balance for the proposed Crest Drive, Storey Boulevard and Friendly Street improvements may result in insufficient funding for delayed assessments for future street improvement projects. System Development Charge Fund – The current methodology restricts the use of SDC funds to the arterial and collector street system. The Crest Drive neighborhood has stated on numerous occasions that it opposes the classification of the Crest Drive area streets as anything but local streets. The City Council will consider the issue of street classification later this fall. Attachment B includes a memo to the Mayor and City Council dated July 17, 2008, responding to a council assignment outlining the steps necessary to be able to spend SDC funds on unclassified streets. In addition to the issues outlined in the memo, use of SDC funds for this project would mean that other projects currently funded and in various stages of project development would have to be delayed. Local Gas Tax – The ordinance establishing the local gas tax limits the use of the revenue to reconstruction, repair, maintenance, operation and preservation. An amendment to the ordinance could be adopted that would allow the funds to be expended on the City’s share of unimproved street improvements. With this alternative an interim source of funds would have to be identified to immediately fund the initiation of the final design to maintain a 2009 construction start. Using a portion of this funding for the proposed Crest Drive, Storey Boulevard and Friendly Street improvements would mean less funding of pavement preservation projects to address the more than $170 million backlog on the improved street system. General Contingency – The FY09 budget included $340,000 in General Contingency. The council has allocated approximately $75,000 of the General Contingency leaving a balance of about $265,000. Use of General Fund contingency for this project would mean that other high-priority emerging issues for the City Council would have no readily-available funding source, and would either have to be delayed or other funding sources would need to be identified. Z:\CMO\2008 Council Agendas\M080908\S080908C.doc