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The estimated cost for the improvement is $194,000. The road can be expected to last between 15 and 20 years <br /> without needing significant maintenance but, if intensively maintained by sealing cracks and taking other steps to <br /> extend the life of the pavement,it could be extended to 25 years. <br /> HOW MUCH WILL IT COST THE CITY TO MAINTAIN THE ROAD IN 25 YEARS? <br /> Some of the costs of the current project will not need to be repeated in 25 years. Clearing and grubbing of the <br /> right-of-way, grading of the ditches and additional topsoil should not be necessary with a future maintenance <br /> project, assuming these areas have been properly maintained in the interim. Crack sealing, new pavement, <br /> additional aggregate shouldering material will be necessary. Removing these items yields a future maintenance <br /> project cost of approximately$106,000(in today's dollars). <br /> Mobilization $ 2,000 <br /> Topsoil Borrow (50% of original) $ 9,973 <br /> Aggregate Surfacing $ 1,800 <br /> Aggregate Shouldering $ 2,992 <br /> Bituminous Gutter $4,000 <br /> Bituminous Wearing Course $ 56,100 <br /> Traffic Control 250 <br /> Subtotal $ 77,115 <br /> Contingencies (15%)2 11,567 <br /> Subtotal $ 88,682 <br /> Engineering, Administration, etc... (20%) 17,736 <br /> TOTAL $ 106,419 <br /> Converting this estimated cost into a project cost 25 years into the future requires an assumption on the rate of <br /> inflation.We will model different assumptions, but as a base analysis we will assume that the inflation rate and the <br /> rate of tax increase within the city hold at 1.5% annually. This would yield a future project cost estimated at <br /> $154,400. <br /> HOW MUCH REVENUE WILL THE CITY COLLECT OVER THE NEXT 25 YEARS TO MAKE THESE IMPROVEMENTS? <br /> Currently 18% of the city's budget goes to capital improvements of roads. This includes all road projects <br /> throughout the city but excludes day-to-day maintenance activities like plowing and mowing ditches. <br /> If we examine the amount of city tax each property is paying and apply 18% of that to the capital improvements <br /> budget,the properties in this neighborhood contributed$2,640 in 2009. <br /> If we assume, as we did with the cost of the project,that taxes rise at the rate of inflation, and project that rate to <br /> be 1.7%, in 25 years these properties will cumulatively have contributed $79,400 in taxes paid to the capital <br /> improvements efforts of the city. <br /> Z We have increased the contingencies here from 10%to 15% given the unpredictability of estimating costs for a <br /> project set to occur in 25 years. <br /> Page 1 2 <br />