1. GOING FORWARD The Street Strategy

2. Current Challenge Existing street conditions unacceptable Steady decrease in street improvement construction Debt for SIP continues to increase Current program – 1 mile of reconstruct, 1-2 miles of MSA, 2 miles overlay

3. Street Strategy Vision Improve 15-20 miles every year Pay as you go system – no new SIP debt Eliminate existing SIP debt (35.6mil) Eliminate general fund subsidy of the SIP Create new jobs and work for local contractors Increase “Curb Appeal”

4. Street Strategy Principals Balanced strategy: Reconstruction, Preservation, Maintenance Eliminate Debt Financing Quality, durability of the work is paramount Increased accountability for performance Increase predictability, flexibility

5. Street Strategy Investments reconstruction of a typical section:

6. Street Strategy Investments Reconstruction Program builds based on revolving revenue Starts at 1.5 miles in 2010, achieves 3 miles in 2014 and beyond

7. Street Strategy Investments Preservation Mill & Overlay and concrete pavement repairs Improve most heavily traveled roads 35 miles of city streets improved over the next 5 years

8. Street Strategy Investments Enhanced Maintenance/Reconditioning Innovative techniques to improve street condition at lowest possible cost Pothole repair Maintenance cap – 6 miles/yr Reconditioning – 4 miles/yr

9. Street Strategy Financing Reconstruction & Preservation Casino revenue used directly for street improvement Assumes that assessments remain at 25% and reinvested in the program

10. Street Strategy Financing Increased Maintenance Efforts Requires additional $1.4 million Use interest from existing CIT – transferred to the general fund by Charter Declining source of revenue Reduces overtime costs

11. Street Strategy Financing Impact on CIT Current policy relies on debt & subsidizes growth of CIT Strategy moves to PayGo and Debt Payoff Ending debt-free balance of $25 million

12. Street Strategy Financing Long-Term Financial Benefits Improves and protects the integrity of the street system Encourages investment in homes, neighborhoods, businesses Dramatically reduces city debt load and eliminates interest costs SIP

13. Policy Decisions for the Council April 13 th Meeting Resolution of Support of the new Street Strategy Transfer CIT to Debt Fund to pay aggressive debt repayment schedule Commit current year CIT directly to 2009 Street Program Pass a resolution of intent for 2010 Street Program

14. Street Strategy Benefits 100 Miles of Duluth streets will be significantly improved in the next 5 years Eliminate all Street Improvement Debt by 2017 Allows new tax base growth to support general fund operations Requires no additional taxpayer support