HomeMy WebLinkAboutCIP 2014-2018 continued
4646 Dakota Street SE
Prior Lake, MN 55372
CITY COUNCIL WORKSHOP REPORT
MEETING DATE: JULY 22, 2013
PREPARED BY: JERILYN ERICKSON, FINANCE DIRECTOR
LARRY POPPLER, CITY ENGINEER/DIRECTOR OF INSPECTIONS
KATY GEHLER, PUBLIC WORKS/NATURAL RESOURCES DIRECTOR
PRESENTED JERILYN ERICKSON, LARRY POPPLER, AND KATY GEHLER
BY:
TOPIC: DRAFT 2014 – 2018 CAPITAL IMPROVEMENT PROGRAM
(continued from July 8, 2013)
DISCUSSION: Introduction
The purpose of this workshop is to complete a city council review and
receive councilor input regarding the proposed 2014-2018 Capital
Improvement Program (CIP) which includes the following draft plans:
1) Facilities Management Plan
2) Equipment Replacement Plan
3) Park Equipment Replacement Plan
4) Technology Plan
5) Utility Capital Projects
6) Transportation Plan (10-year)
7) Water Operating Plan (10-year)
8) Sanitary Sewer Operating Plan (10-year)
9) Water Quality Operating Plan (10-year)
History
The City’s Capital Improvement Program (CIP) has become our most
important and impactful financial planning tool for the following reasons:
It sets forth the actions we intend to take alone or with others to
restore, build or replace city infrastructure estimated to exceed $400
million.
It is a multi-year document which divides the financial planning
focus over nine key infrastructure systems.
The CIP reflects the City Council values as follows:
Delayed repair and maintenance ultimately results in higher costs
so do not “kick the can down the road to future taxpayers.”
Studies show that the most cost effective road investment dollars is
preventative maintenance so focus funds in this area.
The life span and operating cost of rolling stock and public buildings
can be extended and minimized, respectively, through aggressive
preventative maintenance.
In addition to buying replacement rolling stock, implement tactics
like refurbishment, buying used equipment and buying equipment
with other entities when appropriate.
Invest in technology to squeeze the most out of our personnel
investment.
Collaborate with other entities to more cost effectively do those
things which were once done alone.
Articulate the purpose of each fund balance and focus on
maintaining each at the appropriate level.
Adjust rates annually to mitigate against less frequent but more
significant rate increases.
Current Circumstances
Staff has updated the CIP and will present the 2014 projects along with the
following long range plans at the workshop for City Council consideration:
1) Facilities Management Plan **
2) Equipment Replacement Plan **
3) Park Equipment Replacement Plan **
4) Technology Plan
5) Utility Capital Projects
6) Transportation Plan (10-year) **
7) Water Operating Plan (10-year)
8) Sanitary Sewer Operating Plan (10-year)
9) Water Quality Operating Plan (10-year)
**Discussed at the July 8, 2013 council workshop.
The draft summary documents have been included for City Council review.
The supporting documentation for each of the plans is available if needed.
Conclusion
The City Council should provide Staff with comments and input on the Draft
CIP so that it can be refined in preparation for the public review and
approval process.
The Planning Commission will be reviewing the proposed CIP on Monday,
August 5 for consistency with the Comprehensive Plan.
A public hearing before the City Council is scheduled for the proposed CIP
on Monday, August 12.
ISSUES: 1. Facility Management Plan
The Facility Replacement Plan (FMP), much like the fleet and park
replacement plans, was developed to plan for MAJOR repairs,
replacements and upgrades on a long term basis (25 years) for all of our
facilities. The FMP uses standard life expectancy of the facility
components and equipment to determine the appropriate placement in the
plan. There are no changes this year.
It continues to be our intent to initiate a Guaranteed Energy Savings
Program (GESP) and the first steps in this direction have been taken. The
projects listed below could be incorporated in the GESP if that is
determined to be the most cost effective course of action.
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2014
Maintenance Center Membrane Roofing $300,500
Library / Club Prior Carpet & Misc. $70,896
Total $371,396
2015
Fire Station #1 Apparatus Bay doors $143,052
and heating
Total $143,052
2016
Maintenance Center Overhead Doors $27,501
Police Garage Doors $40,575
Fire Station #2 Gas Monitors $18,548
Total $86,624
2017
16244 Main Avenue $4,776
(Flowers Naturally) Boilers (Depends on
condition and Main
Avenue project
timeline)
Library / Club Prior Membrane Roofing $179,108
Total $183,884
2018
Fire Station #1 Flooring & Lighting $212,368
Maintenance Center Lighting & HVAC $271,187
Water Treatment Doors & Sump Pump $5,534
Facility
Total $489,090
2. Equipment Replacement Plan
An evaluation of the condition of the City’s fleet has been completed as
directed by the council and compared to the Equipment Replacement Plan
Based on this evaluation, adjustments have been made to the timeline for
the replacement of some equipment. The tax levy has been reduced for
2014-2016. Some of the major equipment purchases have been
summarized below.
2014
Public Works 5 Ton, Single Axle $196,000
Public Works 1 Ton Plow (2) $118,000
Public Works Loader w/ plow $223,000
2015
Public Works 5 Ton, Single Axle $202,000
Public Works Street Sweeper $156,000
2016
Fire Tanker $174,000
Public Works 5 Ton, Single Axle $208,000
Public Works Water Tanker $158,000
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2017
Public Works 5 Ton, Single Axle $214,000
Public Works Street Sweeper $178,000
2018
Fire Pumper $580,000
Public Works 5 Ton, Single Axle $220,000
3. Park Equipment Replacement Plan
There are essentially no changes to the Park Replacement Plan at this
point. Staff is reviewing equipment replacement in conjunction with their
2014 budget requests. It should be noted that this plan currently
contemplates replacements within the boundaries of the parks system.
Trails, sidewalks, and boardwalks located outside of these areas will also
be added to the matrix over the next year.
As our parks grow older various capital items require replacement. A good
example is the safety netting at the softball fields. This netting has allowed
us to safely use the existing fields at the Ponds for adult softball despite the
fact they are now considered undersized. The nets require replacement
and the question is how this cost should be supported. There are other
examples as well.
Staff is looking for direction from the Council regarding base services
versus services needed to support specific organizations. We have
assumed the continuation of our existing purchase of maintenance service
program.
4. Technology Plan
The Technology Plan reflects the acquisition and implementation of the
Enterprise Resource Planning software in 2014.
5. Utility Capital Projects
Water
The 2013-2017 CIP included two projects: the development of Well 10, and
a development driven elevated storage tank. Since last year there has
been significant development with these projects.
Staff has been working with the SMSC to develop a joint water system that
would meet the needs of both the well and storage tank projects. It should
be noted that these projects were intended to address existing system
deficiencies and slightly postpone development-driven infrastructure. Staff
from both organizations has been working on developing an agreement
which will be presented to the Council for consideration in the near future.
In addition, the SMSC has been working on the design and will begin
construction this fall.
For this reason the two projects contemplated in 2013 have now been
removed and the costs associated with the joint water agreement have
been incorporated in the CIP and operating plans.
The billing revenues calculated in the Water Operating Plan assumes
consumption levels in line with development rates; however, it does not
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reflect the facilities needed to support that level of consumption (i.e.
additional wells and treatment). Later this year staff will be updating the
Water Plan that will address additional source, storage and treatment and
will also evaluate our distribution needs as we continue to develop. We
anticipate this study will establish a timeline for future capital projects
including additional wells, western treatment facility and elevated storage.
Although the Water Treatment Facility (WTF) still seems new, the
equipment has been in operation for 4 years. The WTF houses several
pieces of equipment that will need more significant repairs or replacement
in the coming years. A facility replacement plan has been developed to
define the system needs. An amount for these repairs has been
incorporated into the CIP.
Sanitary Sewer
There are no changes for the 2014-2018 CIP which includes $150k each
year to target inflow and infiltration (I/I) projects. Due to the higher levels of
I/I that occurred in 2011, staff is recommending that a comprehensive
sewer televising evaluation be completed to identify target areas, prioritize
projects and refine needs identified in subsequent CIPs. Staff has
identified an approach for the televising that includes completing about 1/3
of the system in 2013 focusing on areas anticipated to be problematic. The
remaining system televising can be completed in 2014/2015 balancing the
needs of the system.
Water Quality/Surface Water
There have been a few adjustments to note in the Water Quality Fund.
Inspection of the entire storm sewer system was started in 2012 and was
completed early this year. These inspections identified a number of
deferred maintenance issues that should be addressed before they
become larger more costly projects and also to maintain the functionality of
the system. The CIP has identified additional funding through 2018 to
address the system maintenance. To offset the increase pond
maintenance was reduced in 2015 and then increased in 2019 and 2021 to
catch up.
Staff is in the process of completing an inventory of all vegetative Best
Management Practices (BMPs) and natural areas. Major maintenance of
some of these areas is anticipated and will be included in the 2015-2019
CIP.
The TMDL Implementation Plan for Spring Lake and Upper Prior Lake
(Lower Prior does not have a TMDL) identifies several projects to bring the
lakes back in compliance with the water quality standards. Although many
of the projects identified will be led by the Watershed District, the City may
be asked to participate as a project partner. For example, one of the action
items requires the City and Watershed District to look for opportunities to
provide enhanced water quality benefits with local street projects (i.e.
CR12/17 Wetland Enhancement). As these projects are identified they will
be added to the CIP.
Funding for capital projects has been planned through utility revenues,
however, grant opportunities and funding partners will be sought to offset
some of these costs.
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6. Transportation Plan
The Transportation Plan has been updated and enhanced with additional
categories to allow the City Council to better understand project details.
The timing of projects has been adjusted based on previously discussed
City Council priorities, pavement degradation analysis, and timing with
other project partners.
Pavement Management
A pavement management system is a tool to be used to assist in creating
appropriate budgets for preventative maintenance, resurfacing, and
reconstruction and selecting individual projects. Other aspects go into
selecting projects including: safety improvements, utility condition, roadway
classification, traffic volumes, drainage issues, roadway geometry, non-
motorized transportation needs, and outside/partner funding availability.
The City currently has 94 miles of asphalt streets that can be classified into
three categories based on maintenance need: preventative maintenance,
resurfacing, and reconstruction. The chart below shows the distribution in
each category. The average network OCI currently is 79.
Existing Distribution of Road Conditions
65 to 100
83%
PreventativeMaintenance
78 Miles
Rehab./Recon.
10 Miles
Resurface
6 Miles
0 to 45
11%
Network OCI: 79
45 to 65
Total: 94 Miles
6%
Does not include gravel roads
An optimal maintenance schedule has been developed. The optimal
maintenance schedule suggests that crack sealing and seal coating be
completed every 5-7 years. Seal coating can ward off early freeze/thaw
damage by sealing minor cracks before they spread for a fraction of the
cost of overlays. If the road is sealed properly overlays can be extended on
a 15-20 year frequency. Ideally a pavement can last 50-60 years before
reconstruction is needed. This also is in line with the lifespan of the
concrete portions of the road surface such as the curb, gutters, and
pedestrian ramps.
Based on the optimal maintenance of the 94 miles of roads the table titled
Annual Costs of Pavement Management shows the annual costs for each
maintenance type. Note that this is the average annual cost with
fluctuations expected each year based on the actual need of the system.
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Annual Costs for Pavement Management
Maintenance Activity Annual Cost
Seal Coat 6.75 miles $107,000
Overlay 3.37 miles $345,000
Reconstruct 1.68 miles $2,630,000
Annual Total $3,082,000
The most significant financial outcome of the pavement analysis was the
level of funding it suggested for preventative maintenance and resurfacing
projects. The current budget includes $400k for overlays, crack sealing
and seal coating, $50k less than the suggested $450k. The City currently
sealcoats mileage in line with the results. However, we have been
averaging overlay amounts significantly less.
Further discussion should occur during the budgeting process to address
the shortfall. The council may wish to provide feedback on addressing the
shortfall to aid in preparation of the draft budgets.
Project Revisions from the 2013-2022 TIP to the 2014-2023 TIP
2014
Hickory South, Copper Cove, Bolger Oversizing – A number of new
developments have emerged. The appropriate oversizing must be
incorporated into the CIP.
Rolling Oaks – In order to serve the Bolger property with
appropriate sanitary sewer to reduce redundancy in the system,
reconstruction of Rolling Oaks should be considered. This would be
a first time improvement and would incorporate large assessments
to complete the project. This project would eliminate a gravel
roadway on the City road network and improve a problematic
drainage issue.
Maplewood – Maplewood is a short roadway that has been in the
CIP for a number of years. Staff is proposing this project be
completed with the nearby Mushtown/Maple project. This was
moved from 2015.
Stemmer Ridge Road – An EAW, right of way acquisition, and
master planning must be completed to proceed with completion of
Stemmer Ridge Road. As such the planning effort and right of way
acquisition is proposed in 2014 and construction of Stemmer Ridge
Road from CSAH 82 to Stemmer Ridge is proposed in 2015.
Crest Avenue Rehabilitation – The deterioration of Crest Avenue
has continued. As such Crest Avenue is proposed to move to 2014
instead of 2016. The costs identified for this segment will convert
Crest Avenue into a similar roadway as Carriage Hills Parkway with
turn lanes and medians.
2015
Stemmer Ridge Road – The full Stemmer Ridge Road project is
proposed in 2015 from CSAH 82 to the existing Stemmer Ridge
Road. The planning, AUAR/EAW and design effort is proposed in
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2014.
Albany, CJ Circle, Five Hawks – CJ Circle and Five Hawks were
added to the Albany project to complete these segments in
conjunction with the Albany project.
Duluth Avenue – MNDOT is proposing a signal replacement in
2015. Considering the issues found in the Downtown South Study,
additional City funding is proposed to address issues on our local
street network to improve the function of the intersection.
2016
Franklin Trail Rehabilitation – Considering that Crest Avenue is in
worse condition, Franklin Trail was shifted back to 2016.
Manitou Road – The improvement to Manitou was moved from 2017
to 2016.
CR 21/Fountain Hills Signal – This signal project is a developer
driven project. With no development near this intersection, the
timing has been moved back from 2014.
Crest Avenue Rehabilitation – The City’s Public Works Department
has performed spot repairs on this collector street in recent years.
By 2016 additional work will be needed. Eventually this roadway
will connect to Carriage Hills Parkway.
2017
Wagon Bridge Pedestrian Crossing – The City has performed a
study of a pedestrian crossing at the Wagon Bridge. The majority of
the funding for this project would come from Federal grant dollars.
The City and County have not yet secured funding for this project
and thus propose the project for 2017 rather than 2016. Until
additional funding can be secured the timing of this project will
continue to be adjusted.
Arcadia Avenue – Considering the possibility of extending Arcadia
from Colorado Street to TH 13, design and right of way acquisition
must be done ahead of any project. While further evaluation of this
possibility is underway, planning for these costs is appropriate.
Pershing/Dunkirk/Dutch/Roanoke/Green Hts/Spring – A
rehabilitation project is recommended for this neighborhood in 2017.
Sycamore – The City recently took ownership of this roadway.
Because of the pavement condition and utility issues this project is
recommended for reconstruction in 2017.
Credit River Road – This project has been adjusted to be completed
in 2017 rather than 2016.
2018
Arcadia Avenue Extension and Duluth Connection – In association
with the design in 2017, various segments of the extension of
Arcadia are incorporated into the transportation plan. While further
evaluation of this possibility is underway, planning for these costs is
appropriate.
TH 13 / CR 21 / Main – The City was unsuccessful in securing
funding for this project in 2015 through CIMS a MNDOT program.
The Scott County TIP has anticipated this project for 2019. In
anticipation of a 2019 project, funding for the design effort is
recommended and shown in the City CIP. The City and County will
continue to explore MNDOT funding options for this project. Until
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MNDOT funding is secured, the timing of this project may continue
to change.
Balsam/Sunrise – This project was adjusted to 2018.
Martindale / Hickory / Henning – Currently these streets do not have
City utilities. City Utilities can’t be extended until future
development occurs. However, the pavement condition is poor and
needs attention.
Huron / Wildwood / Woodside – Reconstruction of this
neighborhood moves into the 5 year CIP. Utility issues must be
addressed with this project.
2019-2023
Recognizing that many projects are shifted within our 5 year CIP, projects
scheduled for 2019 – 2023 show general non-specific information. Staff
recommends rehabilitation or reconstruction of 2 miles per year.
7. Water Operating Plan
The Water Operating Plan includes projects associated with the
Transportation Plan and Capital Water Projects. Historically, utility rates
were adjusted by large increases in conjunction with an anticipated large
future capital improvement. This would allow the City to build a large
reserve and use those funds (all or in part) to fund the capital improvement.
Beginning with the 2012-2016 CIP, the Council decided to change the
approach for rate adjustments to smaller annual increases and possibly an
annual percentage increase.
Based on the capital improvement projects contemplated in the proposed
Transportation Plan and CIP, inflationary pressures on operating and
maintenance costs, and maintaining a minimum fund balance reserve of
$1.2M (adjusted for inflation), the following rate changes would be
necessary:
Rates <25,000 Gallons; $ Change; % Change
2012 $ 3.15 $ 0.50 18.9%
2013 $ 3.40 $ 0.25 7.9%
2014 $ 3.65 $ 0.25 7.4%
2015 $ 3.90 $ 0.25 6.8%
2016 $ 3.98 $ 0.08 2.0%
2017 $ 4.06 $ 0.08 2.0%
2018 $ 4.21 $ 0.15 3.7%
Rates >25,000 Gallons; $ Change; % Change
2012 $ 4.34 $ 0.69 18.9%
2013 $ 4.69 $ 0.35 8.1%
2014 $ 5.03 $ 0.34 7.2%
2015 $ 5.37 $ 0.34 6.8%
2016 $ 5.48 $ 0.11 2.0%
2017 $ 5.59 $ 0.11 2.0%
2018 $ 5.80 $ 0.21 3.7%
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In 2014, a $0.25 increase for the under-25,000 gallon usage and a$0.34
increase for the over-25,000 gallon usage should be considered. Fixed
amounts for increases in 2015 and 2018 and an incremental (2.0%)
increase in the remaining years would also be necessary to meet the
capital funding needs, inflationary pressures and minimum fund balance
reserves.
Over the next year there are several planning efforts that will inform the CIP
and potentially impact the rates. Later this year the Water Plan is
anticipated to be updated identifying additional infrastructure needs. This
plan will then be worked into a review of rates and development fees.
The council may want to contemplate updates to the water conservation
policy, consider a more aggressive tiered rate structure, and reserve
balance policy.
8. Sanitary Sewer Operating Plan
Similar to the water rates, sewer rates were historically adjusted with large
increases. In 2010, the MCES sewer rate and City sewer rate were broken
out from one combined sewer charge. Despite increases in the MCES
charge from the Met Council, the Sewer Fund absorbed the increase in
2010 and 2011.
Beginning with the 2012-2016 CIP, the Council decided to change the
approach of large rate increases to smaller annual increases, possibly an
annual percentage increase for the City Sewer rate as well as passing
through the MCES charge each year to residents.
Based on the capital improvement projects contemplated in the
Transportation Plan and CIP, inflationary pressures on operating and
maintenance costs, increases in the MCES charge and maintaining a
minimum fund balance reserve of $1.2M (adjusted for inflation), the
following rate changes would be necessary:
MCES Rate; $ Change; % Change
2012 $ 2.05 $ 0.30 17.14%
2013 $ 2.11 $ 0.06 2.93%
2014 $ 2.11 $ - 0.00%
2015 $ 2.16 $ 0.05 2.25%
2016 $ 2.21 $ 0.05 2.25%
2017 $ 2.26 $ 0.05 2.25%
2018 $ 2.31 $ 0.05 2.25%
City Sewer Rate; $ Change; % Change
2012 $ 1.90 $ - 0.0%
2013 $ 1.96 $ 0.06 3.2%
2014 $ 1.96 $ - 0.0%
2015 $ 2.00 $ 0.04 2.0%
2016 $ 2.04 $ 0.04 2.0%
2017 $ 2.08 $ 0.04 2.0%
2018 $ 2.12 $ 0.04 2.0%
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As can be seen by the table above, we are able to leave the 2014 rates at
2013 levels for both MCES and City sewer. Continued adjustment of the
MCES sewer rate in future years is anticipated to reflect the actual charges
from the Met Council and incremental (2.0%) increases in the City sewer
rate beginning in 2015 would be necessary to meet the ongoing capital
funding needs, inflationary pressures and minimum fund balance reserves.
9. Water Quality Operating Plan
The storm water rate was increased in 2013 from $9.00/billing cycle to
$11.25/billing cycle. Based on proposed capital improvement projects as
outlined in the Transportation Plan and CIP, inflationary pressures on
operating and maintenance costs, and minimum fund balance reserves, the
following rate changes would be necessary:
Storm Water Rate: $ Change; % Change
2012 $ 9.00 $ 1.75 24.14%
2013 $ 11.25 $ 2.25 25.00%
2014 $ 13.25 $ 2.00 17.78%
2015 $ 13.50 $ 0.25 1.89%
2016 $ 13.75 $ 0.25 1.85%
2017 $ 14.00 $ 0.25 1.82%
2018 $ 14.25 $ 0.25 1.79%
Depending on the availability and awarding of grant opportunities, the
future rate increases could be deferred.
10. Unprogrammed Projects
There are several other projects or areas of interest that have been
broached in the past but not formally incorporated into the CIP.
Park and Trail Planning
There has been interest in reviewing the level of which the City develops
and maintains the park system. In addition there has been interest in
identifying areas where gaps in our trail system exist and incorporating
these projects into the CIP.
In 2012, funding was proposed to complete a comprehensive Parks and
Trails plan. This plan would evaluate the current and future needs of the
system and make recommendations for future park development that could
include consolidation of existing parks, identifying trail connections, and
exploring upgrades to better manage our current facilities. During the 2013
budget discussions, this study was put on hold as one of the budget
management items.
Athletic Facilities
At the work session on July 8, 2013 there was some discussion regarding
the functionality of our athletic complexes as the use has grown. In 2013,
our facilities will be the host to several tournaments bringing 70+ teams into
Prior Lake each time. This scale of play requires surety to accommodate
the games. To make our complexes function more efficiently and better
serve the needs of both the growing associations and the tournaments, a
number of improvements could be programmed including parking,
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drainage, lighting control, and irrigation control. Staff would like some
direction from the Council as to the level of service the City should be
providing to the community.
Community Park Development
The current long-term financial plan comprehends the development of
Spring Lake Park assuming support by referendum. The plan does not
comprehend development costs for the newly acquired park land around
Pike Lake. Staff has been working with a stakeholder group including the
SMSC, YMCA, Scott County/Three Rivers, and Watershed District on
potential collaborations for development of this land including completion of
a master plan. The master plan will inform potential future additions to the
CIP.
Trail Connections
A goal of the 2030 Vision and Strategic Plan is to “Develop and approve a
plan for safety and interconnectivity improvements to sidewalks, bike paths
and trails serving schools, neighborhoods, downtown and parks by
December 31, 2012.” The trails analysis will identify gaps in connectivity
and prioritize improvements to the system.
Arguably the most significant gap in the pedestrian network and the most
challenging is along Trunk Highway 13 between County Road 42 and
County Road 21. Several committees within the City have identified the
Highway 13 Trail as a priority and a preliminary study of alignments was
completed to inform the design of the Ridgemont/Main project. Completion
of the study will include coordination with potential project collaborators,
refinement of costs, and potential funding sources (i.e. grant programs).
Self-Contained Breathing Apparatus (SCBA)
The Fire Department is anticipating the replacement of the SCBA units
beginning in approximately 2016. An estimated cost will be forthcoming
and factored into future CIPs. Staff will also be seeking any grant
opportunities that may be available.
Other Capital Purchases
While the staff is mindful of the impact of the proposed CIP on the tax levy
and water, sewer and storm water rates, the City Council should be aware
that none of the projects listed below are contemplated in the draft CIP:
1) Purchase of property for economic development (i.e. Monnens, ,
etc.
2) Distressed home near the library
3) Development of existing city property: Pike Lake and/or Spring
Lake
FINANCIAL All items contained in the CIP require City Council approval prior to
IMPACT:
construction or acquisition. Approval of the CIP does not obligate the City
to complete the proposed projects. The 2014 projects, equipment
replacement costs and facility repairs will be incorporated into the 2014
budget requests for budgeted funds.
A Debt and Tax Levy Analysis report as well as other financial information
related to the impact of the proposed CIP on fund balance reserves and
average utility customer will be distributed at the workshop.
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RECOMMENDED The Council should provide comments on the draft document and its
ACTION:
various elements in order that the approval process can proceed as
planned.
REPORTS / 1) Facilities Management Plan
CHARTS
2) Equipment Replacement Plan
ATTACHED:
3) Park Equipment Replacement Plan
4) Technology Plan
5) Transportation Plan (10-year)
6) Water Operating Plan (10-year)
7) Sanitary Sewer Operating Plan (10-year)
8) Water Quality Operating Plan (10-year)
9) CIP Projects by Department
10) CIP Project Detail
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DEBT ANALYSIS AND TAX IMPACT
DRAFT CIP 2013.07.22
In reviewing the 2014-2018 Capital Improvement Program, the City Council should consider the level of
debt as well as the annual tax impact of the scheduled projects.
As of 12/31/2012, the City of Prior Lake had $47,420,000 in debt. The following chart reflects the type
of debt that comprised the $47M:
Debt Type Amount Purpose
G.O. Special Assessment $ 8,730,000 Street Improvement Projects
Bonds
G.O. Tax Increment 290,000 Tax Increment Pro�ect
G.O. Bonds (MV) 19,880,000 Referendum Projects (Park & Fire
Stations)
G.O. Bonds 775,000 Street Reconstruction Pro'ect
Revenue Bonds 8,840,000 Ci Hall & Police Station (EDA)
G.O. Revenue Bonds 8,225,000 Maintenance Facility & Water
Treatment Facili
G.O. Capital Improvement 680,000 Scott County Cooperative Agreement
Bonds
Total $ 47,420,000
It should be noted that the 12/31/2012 balance shown above reflects debt associated with advance
refunding bonds issued in 2011 and 2012 as well as the original debt that is being refunded. For purposes
of this report, both the new debt and old (refunded) debt will be included in the outstanding debt balance
until it is paid off from escrowed funds. The 2012 annual financial report does not include the refunded
debt associated with the EDA lease revenue bond because it was considered "in substance defeased."
The 2014-2018 CIP includes projects that are funded by bond proceeds. Bonds are issued for the project
costs that the City is funding through tax levies as well as the costs that are specially assessed to property
owners. The CIP anticipates $26,302,000 in bonding for projects in the Transportation Plan for 2014-
2018, $300,000 far major facility repairs in 2014 and $580,000 for equipment replacement in 2018.
Major projects scheduled for 2014 which involve a property tax levy (payable 2015) are listed below:
Pro'ect Descri tion Pro'ect Le
CSAH 44 (Fish Point Road to City Limits) $ 100,000
Crest Avenue Rehabilitation 1,450,000
Mushtown / Maple / Panama 500,000
Maplewood 200,000
Carria e Hills Rehabilitation (CR21 to Pike Lake) 700,000
Total $ 2,950,000
Page 1 of 4
There is one facility-related project scheduled for 2014 which would be funded with bonds and the debt
service paid with debt service tax levy: •
Pro'ect Descri tion Pro'ect Le
Facili Re airs $ 300,000
Total $ 300,000
The following tables reflect all bonding requirements referenced in the CIP, Transportation Plan,
Facilities Management Plan and Equipment Replacement Plan. It does NOT include the bonding that
may be presented to residents by referendum for community park improvements (identified in the Park
Equipment Replacement Plan) beginning in 2018.
The following chart reflects the cumulative effect of new debt issued as indicated in the CIP and the
retirement of existing debt. The top line is the resulting debt balance at the end of the year.
Projected Debt Balances
$60.0 7.22.2013
$50.0
$40.0
Pay off EDA $8.8M
�' Escrow) in 2013
,o $30.0
� Pay off 2006A
__
""$20.0 Escrow in 2014
$10.0
$0.0
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�� � � ti ti ti ti � � � ti �
—+—Existing Debt tCumm. CIP Debt ��Projected Debt —�New CIP Debt �
The following chart reflects the cumulative effect of new debt issued as indicated in the proposed CIP and
the retirement of existing debt on a per capita basis.
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Debt Per Capita
� $2,500 28,000 P
e $2,000 27,000 �
b 26,000 p
t $1,500 25,000 u
� a$1,000 24,000 �
� 23,000 a
a $500 22,000 t
P $0 YE 21,000 �
� 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 0
Y Debt/Capita 2,036 1,598 1,595 1,709 1,662 1,616 1,614 1,559 1,495 1,444 1,360 1,271 n
f�Population 23,29 23,73 24,10 24,48 24,85 25,23 25,60 25,98 26,35 26,73 27,10 27,48
Based on Population Growth of 1 SO permits/year x 2.5 persons per household
The impact of the 2014-2018 CIP and other anticipated bond payment adjustments on the debt service
property tax levy are reflected in the following tables:
Pro ected Chan e in Debt Lev Totals
2014 2015 2016 2017 2018 2014-2018
Debt:
ExistingClP (75,287) (119,535) 17,840 16,180 (299,625) (460,427)
New CIP 158,000 391,000 405,000 433,000 483,000 1,870,000
Market Referendum 29,943 28,701 48,875 66,700 (790,450) (749,631
Chan e in Debt Lev 112,656 300,166 471,715 382,480 (607,075) 659,942
Projected Deb4 Levy
2013 2014 2015 2016 2017 2018
DebtService 2,809,534 2,922,190 3,222,356 3,694,071 4,076,551 3,469,476
Each year, certain bond issues mature and the corresponding debt service payments are eliminated. In the
early 2000s, the level of bonding was lower due to the capital improvement projects being much smaller
in scope. Current projects are larger due to the fact that we have accelerated the street reconstruction plan
in order to address maintenance issues in a more reasonable time frame. Therefore, the amount of debt
service dropping off each year is less than the amount that we are adding for new CIP projects. This
results in an increase in the debt service properiy tax levy.
The debt associated with Market Referendum bonds which funded park improvements and construction
of the fire stations typically incrementally increases each year. The final payment for the park
improvements occurs in 2017 and significantly decreases per the debt schedule.
For the most part, the debt service for 2014 is already established. The Council will consider approval of
the sale of bonds far the 2013 projects (Welcome Avenue, CR12, Sunset Avenue and TH 13/Main
Avenue/Ridgemont) at the council meeting on July 22, 2013. The first levy associated with this bond
issue will be in 2014.
The proposed CIP projects will impact the debt service levy beginning in 2015. The anticipated bond
payments on debt issued in conjunction with these projects along with payment adjustments on current
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bonds will result in an increased debt service levy of approximately $391,000 for 2015, $405,000 for
2016, $433,000 for 2017, and $483,000 for 2018.
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