8.3. SR 09-02-2014 City of
Elk - Request for Action
River O.
To Item Number
Mayor and City Council 8.3
Agenda Section Meeting Date Prepared by
General Business September 2, 2014 Justin Femrite, P.E., City Engineer
Item Description Reviewed by
Quiet Zone Funding Tim Simon, Finance Director
Reviewed by
Cal Portner, City Administrator
Action Requested
Approve,by motion, funding option for quiet zone improvements and internal loan resolution.
Background/Discussion
Direction from the City Council at the July 7, 2014, meeting was for staff to identify funding options to
support an expanded quiet zone project that would include the installation of a 4-quadrant gate system at
Jackson Avenue. In addition to this treatment at Jackson Avenue,the project will include installation of a
wayside horn system at Proctor Road, and supplemental safety measures (channelization devices/raised
medians) at 171"Avenue, 165"'Avenue, and Jarvis Street. The remaining crossings,will receive smaller
upgrades that include minor channelization devices and signage upgrades.
Historically, there has been no state or federal funding available to assist in the funding of quiet zones.
The State Legislature set a new precedence in their last session when they allocated funding to the cities
of Little Canada and Shoreview for their quiet zone upgrades. The same bill included $2.OM for
additional railroad grade crossing safety improvements along rail routes used for oil transport. Staff has
submitted the needs for our safety upgrades to the state for consideration,but there is no guarantee of
funding.
Staff reviewed various funding options from special assessments to bonding. Since this is a community-
wide benefit staff identified using internal funds to avoid several fees that come with outside funding
(studies, bond issuance costs etc.)
Financial Impact
The current estimate for implementation of a quiet zone is $1,350,000. The current Capital Improvement
Plan identifies $500,000 of the costs funded from the Street Improvement Reserve. Staff discussed
options to fund the remaining$850,000 less any amount that potentially could be received in state grants.
It is proposed to cover this outstanding amount with a loan from the Municipal Liquor Store Enterprise
Fund to be repaid with tax levy line item over a 10-year period starting with the 2015 levy payable 2016.
An $850,000 note,with 2.46% (08/12/14 10 year US treasury rate) interest would require an annual tax
levy line item of$96,402.30. The first payment would be made on February 1, 2017.
Attachments
• Loan Amortization schedule
• Internal loan resolution
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City of
Elk
River
Resolution 14-
A Resolution of the City of Elk River Authorizing an Interfund Loan for the
Implementation of Quiet Zone Improvements
WHEREAS, the city has determined to construct quiet zone improvement to reduce the
sound of train horns in the community; and
WHEREAS, the city is requesting a capital advance in the amount up to $850,000 from
the Liquor Enterprise Fund to the Street Improvement Reserve Fund as an interim financing
source: and
WHEREAS, it is deemed in the best interest of this community-wide project to approve
the Interfund Loan to finance quiet zone improvements.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Elk
River,Minnesota, as follows: authorizes an Interfund Loan for quiet zone improvements,
subject to the following requirements:
1. The principal amount of the Interfund Loan not to exceed $850,000.
2. There will be interest charged on the Interfund Loan at the annual rate of 2.46%.
3. Maintain the schedule of payments to expire on 08/01/2026 or 10 years.
4. Repayments will be made from an annual tax levy starting in 2015 levy year and
taxes payable 2016.
5. There will be no prepayment penalty.
Passed and adopted this 2nd day of September 2014.
John J. Dietz,Mayor
ATTEST:
Tina Allard, City Clerk
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