City Streets: Investing in a Neglected Asset

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CITY OF SALEM Salem Street Fund Revenue FY 05-06 $z,aoo 000 $s,~oo,ooo Locally Rasied Revenue State Highway Fund Revenue The city expects approximately $6.9 million in allocation of State Highway Funds in fiscal year 2006-07. This decrease from $7.1 million in 2005- 06, coupled with decreases in construction fund support and other funding sources is responsible for the dramatic decrease in the overall street system maintenance budget, especially in pavement maintenance. Historically, Salem funds its street capital projects from a variety of sources such as: general obligation bonding; development exactions; transportation system development charges; and federal funds. The city relies on its allocation of State Highway Funds as its primary source of funding for street operations and maintenance. Salem's street fund has many competing demands. For example, street lights, sidewalk repair, street trees, and right of way landscaping are all entirely funded through the city's share of State Highway Funds without assistance from the city's general fund. These needs place increased pressure on already limited transportation funds. The City Council adopted a streetscape utility fee in July 2002 in an attempt to solve a portion of its street maintenance funding problem, The fee would have raised $3 million per year in new funding that would have paid for sidewalk constructionlrepair, street treellandscaping maintenance, and operation of the city's street lights. More importantly, this fee would have reallocated up to $2 million annually of the street fund towards much needed pavement maintenance. Salem's voters repealed the streetscape utility fee in May 2003, leaving the city without a significant local funding source for its street system. In 2003, the city began incrementally transferring water/sewer utility franchise fee revenues to street maintenance over aten-year period. Coupled with the OTIA III-based increase in state title and registration fees, the city was able to set street funding back in a positive direction. Unfortunately, the additional water/sewer franchise fees and State Highway Funds have not kept pace with the rising costs and a growing street maintenance backlog. Inflationary cost increases in fuel, asphalt, concrete, steel, electric and employee wages have eroded the limited funding that is available for street maintenance. The summer of 2006 saw a 37 percent increase in the cost of asphalt mix alone. Electricity costs have risen 22 percent over athree-year period from fiscal years 2003-04 to 2005-06. The city is considering placing a general obligation transportation bond measure on the November 2008 ballot. Nearly one third of the expected bond sale amount will likely go to major street pavement reconstruction and rehabilitation. City Streets: Case Studies -Page 48 CITY OF SALEM The Salem General Fund also has demands to increase expenditures on public safety, parks and library services, as well as a backlog of deferred building and facility maintenance. The incremental transfer ofwater/sewer franchise fees reflects the city council's priority for street maintenance funding at a time when the limits and demands on general fund revenues are increasing. Despite Salem's effort to solve the problem locally, the additional revenues raised are not enough to adequately preserve and maintain the streets of Oregon's capital city. `~ - ~ ~ ~. ~~ - - c ~: ~~~ ~ ~~~ Salem's Critical Street Project List: 1. Downtown Core Grid -Commercial St., Union St.,12th St., FerrylBelleview St.: Condition -Poor -Severely stressed pavements with rutting, structural failures, alligatoring, potholes, and other major defects. Needs Milling and reprofiling along with entirely new pavementfor most street segments. Estimated Cost: $8 million. 2. Center Street NE (9,600 lineal ft.) -17th St. NE to Hawthorne Ave NE: Condition - PoorlFair -Needs milling and 4 inch structural resurfacing and base repairs due to severe cracks, rutting and structural failures. Estimated Cost: $1.4 million. 3. Lancaster Drive NE (1.,000 lineal ft. x 4 lanes) -Wolverine Dr. to Beverly Ave.: Condition - PoorlFair -Needs milling and resurfacing due to severe cracks and rutting. Estimated Cost: $72 000. 4. Cherry Avenue NE (1,500 linear ft.): Condition -Poor -Needs 3 inch structural overlay and full depth repairs due to severe cracks and rutting. Estimated Cost: $75 000. 5. D Street NE (900 linear ft.): Condition -Poor -Needs 3 inch structural overlay and full depth repairs due to severe cracks, rutting and structural failures. Estimated Cost: $31,000. City Streets: Case Studies -Page 49