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HomeMy WebLinkAbout2.C. Draft Capital Improvement Plan (CIP) for 2012-2021xuosEMOUNr CITY COUNCIL City Council Workshop Meeting October 12, 2011 EXECUTIVE `SUMMARY AGENDA ITEM: Draft Capital Improvement Plan (CIP) for 2012 -2021 AGENDA SECTION: ` .PREPARED BY: Dwight Johnson, City Administrator AGENDA NO. ATTACHMENTS: CIP for 2012 -2021 APPROVED BY RECOMMENDED ACTION: Discuss proposed projects in the 10 year CIP and direct staff on any changes desired. BACKGROUND Each year, staff presents a draft 10 year capital improvements program (CIP) for consideration by the City Council. The CIP is a valuable planning tool and also is looked upon favorably by bond rating agencies. While the adoption of the plan does not commit us to any specific expenditure, it does represent our best effort to forecast the City's needs for equipment, vehicles, buildings, park improvements, and other capital improvements. Also built in is debt service for various past projects. Staff reviewed cash flow projections for each of the major funding sources to verify that funds are likely to be available for the listed projects. ASSUMPTIONS Many portions of the CIP depend on the pace of development as do some of our major capital revenue sources such as park improvement funds or,water developer charges. Although growth has not resumed at levels seen several years ago; the new plan does take account of the new subdivisions proposed in recent months. The actual timing of many park and utility projects will depend on how fast these and other subdivisions develop. DISCUSSION OF LISTED PROJECTS BY YEAR The following is a brief discussion of several of the more noteworthy items in the draft CIP, arranged by year: 2012 UMore B # allfields ($800,000). This project is expected to be graded this fall through a donation of in- kind work by Bolander and Sons. Two ball fields will be constructed as apart of phase 1 improvements in 2012. The donation of land from the University in exchange for park dedication credit was recently finalized. s 4. } Rosemount Community Center improvements ($120,000). Improvements and updates to the banquet room, lobby, restrooms and entry area are planned: No major,updates have been done since the building opened in the 1990's. Replace Council Chambers Audio Mi eo.Equipment ($100,000). This expenditure is shown and 2012 but not all of the funds will necessarily be spent in 2012. The plan is to make some improvements in the ability to show documents and drawings in the Council Chambers and reserve some of the funds for equipment replacement in the backroom in the next several years. Our cable commission has advised us to begin setting aside funds for the equipment replacement. 2013 Tennis Courts ($250,000) This project would construct four additional tennis courts and help,provide a density of courts to help make' Rosemount a preferred site for tournaments and special events.. The location could be Erickson Park or in some other central location. This project was previously shown in 2012. y t s i . Steeple Center ($200,000). Funds are proposed from the Building CIP account to improve the lighting and sound and also add air conditioning to the building. Council members have expressed interest in the next phase of improvements that will help make the building more user friendly and also make it more- attractive for summer activities. t New Neighborhood Park N -7 ($500,000). This park would be in the Marshes of. Bloomfield area, assuming that project comes forward for final approval and is under construction. The new park would require sufficient park dedication dollars being generated to fund the project. 2014 New Neighborhood Park N-1 ($500,000)._17his park would be developed in the Prestwick Place neighborhood, which is now under development. It is'possible this project could change places with the N -7 park above, and is also dependent on adequate park °dedication,dollars becoming available. a New well construction ($1,250,000). The timing of anew well also depends on the pace of growth. Currently, we can absorb an estimated 1200 -1500 new residential units before a new, well is required. However, a new well`can take two years to build, so we cannot wait until 1200+ units are actually built. 2015 County Road 73 Right 'of Way: Bonaire. Path to Inver Grove Heights ($347,048). The timing of the extension of Akron Avenue north to our northern border and up to Cliff Road is dependent on the timing of development and must also be coordinated with Dakota County. The dollars in 2015 are for right-of- Way acquisition. Water Storage Facility ($2,800,000). This project would paid from development fees and also depends on the future pace of growth in the community. Coun1y Road 42 /Hwy 52 Interchange ($2,753,401 City share). This project is shown in 2015, but will depend on whenever federal funding can be secured. MSA funds and assessments will be needed to fund the City's share. `` UMore ball field improvements ($300,000). The initial work planned for 2012 will be for phase 1 only. This allocation would allow us to come back and finish two more ball fields and add more of the planned parking lot. 2016 County Road 73 construction to IGH border ($1,405,890). Assessments will be the primary funding source for our share of the construction cost,,but the project may become eligible for Minnesota State Aid (MSA) funding by that time. Well 17 construction ($1,500,000). This is another project that depends on the pace of development. DISCUSSION OF SPECIFIC CAPITAL FUNDS AND ONGOING EXPENDITURES 1. Building CIP Fund. The Building CIP fund is projected to have $1,696,132 at the end of 2011 The first $400,000 of SKB funds each year is designated for the General Fund; all amounts over $400,000 may be designated for capital funds. Over the past two years, the City has received a total of about $1 million per year from SKB funds. We anticipate using Building CIP funds for removal of the house across from City Hall where the Park and Ride lot is planned, and the old St. Joseph's school. Even after these expenditures, if SKB funds continue as projected for the next several years, significant funds will remain for one or more building projects such as a senior housing /senior center complex and a possible partnership with DCTC and the YMCA for an indoor recreation /athletic space. 2. Street CIP Fund. The projected funding for street improvements appears to °be adequate for the next several years, subject to future adjustments for the addition of new streets to the system and any inflation. In the second half of this decade, funding may need to be increased according to long range projections. The Street CIP is also currently the funding source for certain street improvements that do not qualify for .Minnesota State Aid (MSA) funding, such as the future paving of Akron Avenue north of Bonaire Path. 3. Equipment CIP Fund. This fund is designed to have a steady revenue stream that will meet our short and long term equipment replacement needs without the need for dramatic year to year changes in tax requirements. In 2009, the City analyzed and implemented an alternative equipment replacement financial model that extended the replacement time for many vehicles. The CIP continues to use this extended replacement financial model. Actual equipment replacement is determined by the condition of the equipment, not the financial model. For example, five pickup trucks, two other vehicles, two mowers, a hoist, a tree spade and a dump truck will all reach their extended replacement schedule next year. However, only the dump truck is being requested for actual replacement in 2012 due to substantial rust and corrosion problems due to years of plowing. 4. Park Improvement Fund. This fund has a current balance of $1,280,000. With proposed expenditures for UMore ballfields ($800,000), tennis courts, and a new neighborhood park anticipated within the next several years, the current funds on -hand will be depleted. The future park projects are based on the growth assumptions noted at the beginning of this report. Park dedication revenues are directly related to development. 5. Ice Arena Fund. Anticipated Ice Arena projects are included as a part of the Ice Arena Fund. The General Fund transfers $115,000 per year to the Icd Arena Fund. The Ice Arena Fund was reviewed as part of this CIP update and the current rate of fund transfer is sufficient to fund all of the projects listed in the 10 year plan. Regular Ice Arena updates and repairs should help reduce the chance of a sudden failure of a key Ice Arena system. 3 6. Minnesota State Aid Fund. The City receives an annual allocation of gas tax revenues from the State each year. Currently, the amount is about $965,000 per year. These funds are constitutionally dedicated and. the distribution formula is not subject to change by the Legislature. MSA funds are currently providing the upfront money for the extension of Connemara Trail which will be substantially repaid over time with assessments. _ MSA funds can only be used on 20% of our road way system, generally the collector and arterial streets that are not County or State highways. A major proposed future use of MSA funds is allocated to the County Road 42 /1 52 interchange project. The cash flow of our MSA account has been reviewed to verify that these projects can all be funded as planned. 7. Utility Funds, Our Utility funds are strong with the exception of.tlie Water Core fund, which has a balance of only about $247,000 currently. The Water Core Fund receives developer contributions and is used to build new wells and storage facilities as well as pay existing debt service on similar facilities. Water rates were raised in 2010 partially in case water fees are needed to help support debt service requirements. No water rate support for the Water Core Fund was actually needed in, 2010 or 2011, but may be needed' in 2012. The Utility Commission and staff will be recommending utility rate increases in December to help pay for a planned Water Treatment Plant. Future well and storage projects depend on growth,- -but fortunately such projects, will not be needed until more growth occurs. SUMMARY AND CONCLUSION The draft 2012 -2021 Capital Improvements Program will not require any property taxes beyond what is already proposed in the 2012,budget and is designed to be a realistic plan for future projects and equipment needs. It has already been reviewed by the Park and Recreation Commission. Staff recommends that it be submitted,to the Planning Commission for its recommendation after any desire changes are made by the Council. The Planning Commission's role is to evaluate whether or not the proposed CIP is consistent with the adopted Comprehensive Plan `for the City. a z Y .. k 4 10 -YEAR CAPITAL IMPROVEMENT PLAN (CIP) BACKGROUND Historically, the City of Rosemount has usually had some form of 5 -year CIP in place to utilize for its capital improvements. There have been times where just a single year's capital improvements have been addressed and funded. As the City continues to grow, we believe that the careful development and continuous utilization of a realistic Capital Improvement Plan is essential to the proper management of the City. As we looked at developing a new 5- year CIP, it became apparent that the dilemma that the City of Rosemount faces is one of continued growth combined with restoration/reconstruction of the older portions of our city. This being the case, it was almost impossible to develop a plan for a 5 -year period that was very realistic. As work continued on the plan, we decided to explore the possibility of looking out farther and developing a longer plan that would more realistically allow us to plan for the City's future. What has evolved is the following 10 -year Capital Improvement Plan. We believe that great strides have been made to more accurately plan for the future of the City of Rosemount. This document is only a working guide that is utilized by the City Council and its staff to prepare for the future. The first year of the plan will be included as part of the formal budget that is prepared yearly as part of our Truth -in- Taxation process with the following years developed as a working tool for future years' discussions. GENERAL /ADMINISTRATIVE DESCRIPTION The CIP provides for specific funding of items, the nature of which is not considered "current" in their use or life expectancy. These items are generally of a higher estimated cost than $5,000 and will have a life expectancy of 3 years or greater. The source of funding for these expenditures is typically the general tax levy. In some instances, other funding is utilized. For example, beginning in 1996, revenues received from user fees are being designated in various CIP funds for capital improvement /equipment purchases. If these revenues are realized, the equipment or project will be completed and if the revenue is not realized the equipment will not be purchased. Individual departments are designated for each item proposed for purchase in this plan. TYPES OF CAPITAL IMPROVEMENT FUNDS Another area of change for the CIP is the implementation of three separate funds to isolate and better track the types of capital improvements being planned for. The following briefly describes each of the three: Building CIP Fund - This fund is used to account for the on -going capital improvements and possible additions to government buildings. Street CIP Fund - This fund is used to account for the on -going street construction and reconstruction projects within the City and all other major maintenance items related to both paved and unpaved streets including, but not limited to, street lights, signal lights, sidewalks and gravel road resurfacing. 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