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Home My WebLink About7A - 1996-2000 Capital Imp. (', AGENDA #: PREPARED BY: SUBJECT: DATE: INTRODUCTION: 7A RALPH TESCHNER FINANCE DIRECTOR CONSIDER APPROVAL OF 1996-2000 CAPITAL IMPROVEMENT PROGRAM NOVEMBER 20, 1995 Annually the City prepares a capital improvement program which is designed to identify infrastructure improvements which are necessary as a result of primarily two factors; community growth and replacement consideration. The 1996-2000 CIP (Capital Improvement Program) contains those improvements necessary to maintain a progressive community. (See attached document). Such projects include not only city initiated improvements but anticipated County and State road improvements as well. In some cases they involve a financial responsibility on behalf of Prior Lake while in others they may not. In addition, capital equipment purchases are included within the CIP. Within the CIP is a condensed project summary sheet (see amended golden rod attachment entitled "Reference Summary") that presents a list of projects by year along with a financing source recap and the City's specific share of the project cost. This capsule summary should be helpful for the Council to refer back and forth between years as a quick reference guide. Added as a supplement this year, is a sheet entitled "Future Project Horizon". It identifies those projects that are deemed important, however are projected to occur beyond the five year timeframe of the present CIP plan. They are either premature or lack adequate funding at the present time. Making the Council aware of such projects allows for consideration on a more long term basis. Also attached is a list of desirable park amenities designed to enhance the City's overall park system. These improvements, while necessary to improve our park system, have no funding source. Because of bonded indebtedness concerns these pages will not appear in the Capital Improvement Program document. It is important for the Council to recognize that the document is a flexible planning tool that is affected by a number of governmental agencies plus a significant impact by the Shakopee Mdewakanton Dakota Community. The Council should critically review those proposed projects for 1996. These improvements selected for bonding will affect the property taxes in 1997. Council should remember that the school district and county will also influence the level of taxes through their annual levies and periodic referendums and bond issues. 16200 Eagle Creek Ave. S.E., Prior Lake. Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245 AN EQUAL OPPORTUNITY EMPLOYER DISCUSSION: T l ISSUES: Those programs which are not deemed to be of high priority should be eliminated now so they do not generate public expectation or demand and also to avoid unnecessary staff effort and expense. Engineering will follow up the Council decision with respect to project delineation by preparing a feasibility report soon after. Adequate lead time is extremely important for surveying, right of way acquisition and engineering to obtain the best possible bids which is generally early in the year. Subsequent years in the CIP are more important from a plan perspective than an implementation schedule. However, of equal importance is to balance the tax resources from year to year as much as possible. Under the project levy column of the Reference Summary, where the financing sources are outlined, is the cumulative property tax impact by dollar and percentage. The Council directed Staff to incorporate the following five changes into the final draft as a result of the City Council's initial review; 1. Move Mushtown Road project from 1996 to 1997. 2. Eliminate park bond referendum projects and provide a substitute list of projects that may be considered based upon public input and support. 3. Include the Fire Station land acquisition for 1996. 4. Identify the cost of the satellite Fire Station. 5. Flatten out tax impact and move 1997 street overlay project to 1998. In order to balance the tax impact the street reconstruction program was pushed back an additional year. By doing this the property owners will be more willing to recognize and accept that their streets are in a condition whereby reconstruction is necessary. The down side of this delay is that more dollars will be expended out of the operating budget annually to maintain the streets in the interim. The Candy Cove area was patched this year and will require patching again in 1996. The cost of patching on an annual basis would be estimated to be $10,000 for materials and $15,000 in equipment and labor costs if performed by City personne1. All of the above directives have been accomplished. The major projects proposed for 1996 and their individual associated tax impact are as follows: Project Description PrQject Levy City Tax Impact i % $ 1.50 0.23% $ 1.50 0.23% $14.30 2.19% Street Sea1coating Lakefront Park CSAH 21 $50,000 $50,000 $475,000 $575,000 $17.30 2.65 % Totals ... . -~----,--~"-,,~,,---"-"'----"""'~" --- T T The City Council has previously discussed the fact that there is no funding source for the improvement of community parks. This Capital Improvement program proposes a community park allocation of $50,000 in 1996, $75,000 in 1997 and 1998 and $100,000 in 1999 and in the year 2000. In the absence of some other funding source, there would be no other funding allocated for community park improvements. The Pike Lake Project has been moved back to 1997 even though the infrastructure may be needed in 1996 to facilitate the Wensmann development. In this event we would phase the improvements so that we continue to have at least 20% of the project accomplished under special assessments to leverage for the remaining bonds. FINANCIAL IMPACT: Listed below is a year by year tax recap if all the projects that include a tax levy were implemented. The Scott County Assessor has estimated the average mean Prior Lake market value home to be approximately $120,000 This typical value has been utilized for purposes of calculating the following tax impact. (A 1995 base tax of $652.01 [City portion] was utilized to compute the beginning percentage increases. Budgetary increases are excluded for purposes of comparing the effect of capital dollars only within the context of the CIP. Also this model assumes an annual 2% tax capacity valuation growth.) 1996... $575,000 1997 ... $600,000 1998 ... $540,000 1998 - Fire Hall Referendum 1999... $675,000 2000 ... $750,000 i $17.30 $17.64 $15.62 $36.79 $19.15 $20.83 Tax Impact % 2.65% 2.64% 2.27% 5.36% 2.59% 2.76% Project Year and Levy Amount The annual tax impact is very balanced over the course of the CIP with the exception of the proposed fire hall referendum bond tax increase of 5.36% and is intended to be within the 2-3% range so that when combined with the tax levy associated with the operating budget each year we will be at a single digit increase in terms of combined overall tax impact on an annual basis. ALTERNATIVES: The appropriate department heads will present project summation of those improvements which would come under their departmental responsibility. The Council should carefully examine the proposed projects for each year, focusing particularly upon those scheduled for 1996. The following alternatives are available for Council consideration: 1. Provide direction to the staff to modify the proposed program to mitigate annual tax increases while insuring appropriate maintenance of public infrastructure. 2. Amend the 1996-2000 Capital Improvement Program as per Council determination. T1" 3. Approve the proposed 1996-2000 Capital Improvement Program as submitted. RECOMMENDATION: Staff would recommend Alternative 3. While it is important that the Capital Improvement Program be adopted expeditiously, it is equally important that the Council be comfortable and supportive of the proposed projects and their tax consequences. Once the CIP is approved the Engineering department will begin the feasibility study as soon as possible for those projects scheduled for 1996. We believe that the revised draft is responsive to the Council's earlier direction. ACTION REQUIRED: approve the 1996-2000 Capital Improvement nts or as submitted. REVIEWED BY: A9S0S.WRT .. ...~~-- ....~,------~-- 1. 2. 3. CIPOl.WRT FUTURE PROJECTS HORIZON The projects listed below are deemed important, however are projected to occur beyond the five year timeframe of the current capital improvement program plan. They are either premature or lack adequate funding at the present time. Identification of these projects provides an awareness and allows for consideration on a more long term basis. BEYOND 2000 CIP PROJECTS Project Description Project Amount Telemetry CSAH 23 Relocation Water Treatment Plant 400,000.00 1,500,000.00 4,000,000.00 Totals... $5,900,000.00 Financing Source Summary Project Amount Project Levy Trunk Reserve Fund Revenue Bonds 1,500,000.00 400,000.00 4.000.000.00 $5,900,000.00 City Cost 400,000.00 1,500,000.00 4,000,000.00 $5,900,000.00 FUTURE PARK IMPROVEMENTS AND AMENITIES CO~TY PARK (80 ACRES-PIKE LAKE) $ 750,000.00 LAND ACQUISITION-50 ACRES AT $15,000 PER ACRE 30 ACRES DEDICATED CO~TYPARKDEVELOPrvffiNT $1,750,000.00 PIKE LAKE COMMUNITY PARK/PICNIC AREA/TRAILS AND SOFTBALL! ATHLETIC COMPLEX WITH LIGHTS KOP FARM ACQUISITION $ 300,000.00 20 ACRES AT $15,000 PER ACRE LAKEFRONT PARK DEVELOPrvffiNT $ 500,000.00 PER MASTER PLAN THE PONDS IRRIGATION INCLUDES FOUR NEW SOCCER FIELDS $ 75,000.00 4 TOTALLY ACCESSIBLE PLAYGROUNDS $ 140,000.00 $35,000.00 EACH PONDS, MEMORIAL, LAKEFRONT, PIKE LAKE CO~TY BANDSHELL SITE TO BE DETERMINED $ 30,000.00 DANCE STUDIO BUILTIN CONJUNCTION WITH FUTURE LIBRARY EXPANSION AND IMPROVEMENTS $ 500,000.00 TWO DOUBLE TENNIS COURTS LIGHTED COURTS AT LAKE FRONT AND PIKE LAKE $ 90,000.00 4 FIELD SOCCER COMPLEX EXPANSION OF THE PONDS WITH PARKING LOT AND ADDITIONAL ACCESS ROAD $ 150,000.00 NATURAL RESOURCES $ 50,000.00 INTERPRETIVE TRAILS, AND PRAIRIE RESTORATIONS AT LAKEFRONT, THE PONDS, AND WESTBURY TOTAL $4,335,000.00 \