1. Pavement Evaluation Survey Results and Understanding Condition Values PCI February 19, 2014

2. Pavement Evaluation Background 113 centerline miles 121 miles used to normalize pavement width Pavement Condition Index (PCI) used to provide a single numerical rating of pavement condition for comparison purposes 4 year evaluation interval is recommended

3. Results of Pavement Survey 2007-2011 partial pavement surveys by staff had an average PCI value of 72 (Fair to Good) 2013 pavement survey by IMS had an average PCI value of 63 (Fair)

4. Current Condition of Roadway System

5. ConditionPCI ValueMileagePercentage Good76-10028.4 miles25.1% Fair56-7548.2 miles42.5% Poor41-5519.1 miles16.9% Failed0-4017.6 miles15.5% Total113.3 miles Results of Pavement Survey 32.4% or 36.7 miles rated Poor or Failed

6. Pavement Life Curve

7. Maintenance Recommendations & Estimated Costs ConditionPCI ValueMaintenanceCost Good76-100 Crack seal and Minor Patching $1/sf Fair56-75 Minor Patching and Resurfacing $3/sf Poor41-55 Resurfacing & Structural Patching $5/sf Failed0-40 Structural Reconstruction $10/sf

8. Village Engineer’s Observations Lower cost preventative maintenance and minor rehabilitation is the best value to the community. i.e. crack sealing and patching Staff is confident we can consistently achieve a 20-25 year life between major rehabilitations with minimal investment in preventative maintenance and minor rehabilitation. 121 miles divided by 20 years = 6 miles per year. Staff estimates approximately $6.0 million should be spent annually to maintain 20 year cycle.

9. Historic Resurfacing Program Miles of Roadway Resurfaced per Year 20 Year Resurfacing Goal In 2010 focus was on roadway patching due to lack of funding.

12. Tonight’s Focus…Roads Funding roadway maintenance with General Fund surplus has been insufficient to appropriately maintain the roadway system. As we move forward and roads continue to decline, while costs go up, the issue will only get worse.

13. Issue The Village of Gurnee does not have a dedicated funding source to maintain municipal infrastructure. As a results, we are falling behind on pavement maintenance. Important to remember, infrastructure also includes: – Sidewalks – 146 miles – Street Lighting – 1,683 lights – Buildings – 5 main operating facilities – Water Main – 182 miles – Water Storage – 4 elevated tanks, 1 ground storage tank – Sanitary Sewer Main – 84 miles – Storm Sewer Pipe – 134 Miles Expenses included in MFT and Capital Fund Expenses included in Utility Capital Fund

14. Funding Alternatives Property Tax Home Rule Sales Tax Utility Tax Municipal Gasoline Tax Bond Issue Fund with Current Revenues

15. Property Tax The Village of Gurnee does not currently levy a property tax. Eliminated in 2000 in exchange for HMR Sales Tax. To generate $4.4 million, property tax rate of 0.433 would be required. Owner of $250k home would pay an additional $261 per year.

16. Property Tax Comparison Community 2012 Property Tax – Predominant Rate Waukegan15.688 Grayslake13.291 Lindenhurst11.724 Mundelein10.690 Gurnee*9.337 Buffalo Grove9.222 Gurnee8.904 Vernon Hills8.854 Deerfield8.435 Lincolnshire8.057 Highland Park7.612 Libertyville7.532 Lake Bluff6.085 Lake Forest5.099 * = Gurnee rate if 0.433 tax rate were added to current rates. Source: http://countyclerk.lakecountyil.gov/TaxInfo/Tax-Info-District/Pages/default.aspxCommunity 2012 Property Tax - Municipal Only Waukegan2.827 Mundelein1.481 Lake Forest1.148 Buffalo Grove0.929 Deerfield0.719 Highland Park0.709 Lake Bluff0.700 Grayslake0.575 Libertyville0.565 Gurnee*0.433 Lindenhurst0.314 Lincolnshire0.241 Gurnee0.000 Vernon Hills0.000

17. Home Rules (HMR) Sales Tax Currently 0.5% = $4.4 million annually. The HMR sales tax does not apply to the purchase of groceries, drugs, or licensed vehicles. Administered and collected by the State, thereby eliminating the need to add additional staff or funding to manage collection. Increase by 0.5% generates $4.4 million additional revenue. Funds can be dedicated solely for infrastructure improvements via policy adopted by Village Board. Effective January 1 or July 1 annually.

18. Statewide HMR Sales Tax Comparison Rate # of Communities Percentage 3.00%10.6% 2.25%21.1% 2.00%52.9% 1.75%42.3% 1.50%2413.7% 1.25%2112.0% 1.00%7040.0% 0.75%2413.7% 0.50%2112.0% 0.25%31.7% 72.6% at 1.00% or greater Source: http://www.revenue.state.il.us/Publications/LocalGovernment/ST-62.pdf Gurnee

19. Property Tax vs. Sales Tax To generate $4.4 million in revenue…. – Owner of $250k home would pay an additional $260 per year. – To generate an additional $260 in sales tax revenue, resident would have to spend an additional $52,000 per year on local retail goods.

20. Utility Tax Imposed on all persons engaged in the business of distributing, supplying, furnishing or selling gas or electricity for use or consumption within the Village. Can be percentage of gross receipts or unit based (per therms or per kilowatt hour). Regressive in nature - proportion of an individual’s income devoted to consumption declines as income increases, persons at the lower income levels, therefore, tend to pay a larger share of their income in utility tax.

21. Municipal Gasoline Tax Imposed upon the privilege of purchasing motor fuel at retail facilities within the Village. Gas station has the duty to collect tax from each consumer at the time of the motor fuel sales transaction. Submitted on a monthly basis. Village staff processes payments and monitors collection activity.

22. Municipal Motor Fuel Tax Gurnee has 10 gas stations. Using IDOT traffic counts, staff estimates the following revenue: Tax Rate per Gallon Total Projected Revenue $0.01$174,000 $0.015$261,000 $0.02$348,000 $0.025$435,000 $0.03$522,000 $0.035$609,000

23. Next Steps Village staff is seeking feedback on how to proceed: – Status Quo? – New revenue dedicated to infrastructure improvements? – Something in between?