HomeMy WebLinkAbout8D 2014-2018 CIP and Street Reconstruction Plan O 4 PR1p
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Prior Lake_ MN 55372
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CITY COUNCIL AGENDA REPORT
MEETING DATE: AUGUST 12, 2013
AGENDA #: 8D
PREPARED BY: LARRY POPPLER, CITY ENGINEER / INSPECTIONS DIRECTOR
KATY GEHLER, PUBLIC WORKS/NATURAL RESOURCES DIRECTOR
JERILYN ERICKSON, FINANCE DIRECTOR
PRESENTED BY: LARRY POPPLER, KATY GEHLER, JERILYN ERICKSON
AGENDA ITEM: CONDUCT A PUBLIC HEARING TO CONSIDER THE 2014-2018 CAPITAL IM-
PROVEMENT PROGRAM (CIP) AND STREET RECONSTRUCTION PLAN
DISCUSSION: Introduction
The purpose of this agenda item is for the City Council to conduct a public hearing
on the proposed projects within the 2014-2018 Capital Improvement Program (CIP)
and Street Reconstruction Plan. Because the Street Reconstruction Plan proposes
to utilize bonds issued under State Statute 475.58 for street reconstruction, a public
hearing for purposes of reviewing the street reconstruction plan is required. For the
purposes of this agenda item and the public hearing the CIP inctudes the Street
. Reconstruction Plans as a part of the overall City Transportation Plan.
Histo
The Capital Improvement Program is the city's singular most important long term
financial planning tool. The CIP is updated on an annual basis. The CIP is designed
to identify infrastructure improvements and the associated funding sources needed
due to ongoing maintenance, repair and community growth. Such projects include
City-initiated improvements, county and state road improvements and improve-
ments requested by developers.
The following long-term planning documents are also part of the CIP:
• Transportation Plan (2014-2023) — identifies the major roadway improvements
involving both new and reconstruction projects that need to be coordinated with
Scott County.
• Equipment Replacement Plan (2014-2025) - identifies the City's vehicle and
equipment needs and establishes a regular replacement schedule.
• Park Equipment Replacement Plan (2014-2038) — identifies the equipment
replacement demands for 46 neighborhood parks.
• Technology Plan (2014-2021) — identifies hardware and software needs and
establishes a regular replacement schedule.
• Facilities Management Plan (2014-2037) — identifies major repairs or im-
provements to all City-owned buildings.
In addition, staff prepares long-term planning documents for the Water Fund, Sew-
er Fund and Water Quality Fund to review reserve levels and utility rates. These
operating plans are not included in the CIP.
The 2014-2018 CIP ($51.3 million) is larger in scope than the 2013-2017 CIP
($42.5 million). This is primarily due to changes in the Transportation Plan but also
due to the fact that projects are contained in the new plan that were not contem-
plated in last year's plan (Arcadia and Stemmer extension for example). The 2014-
2018 CIP only reflects the City's financial share of other governmental agency pro-
jects.
A draft copy of the 2014-2018 Capital Improvement Program was distributed for
your review in conjunction with the July 8, 22 and 29, 2013 Council workshops.
Staff provided a detailed overview of the 2014 projects and highlights for the major
projects scheduled for 2015-2018 previously at city council workshops. The impact
of the bonds that would be required to support the10-year transportation plan in-
cluding street reconstruction was graphically shown from an annual debt levy per-
spective as well. The impacts on the tax levy, Municipa� State Aid and utility rates
were also shown.
On August 5, 2013, the Planning Commission reviewed the proposed CIP and
adopted a resolution finding that the capital improvements identified in the 2014-
2018 Capital Improvement Program were in compliance with the Comprehensive
Plan. A copy of the resolution is attached with this agenda report.
Current Circumstances
A public hearing is being held today for the purpose of receiving public input on the
. 2014-2018 CIP. •
It is important for the Council to recognize that the CIP is a flexible planning tool
that is affected by the actions of a number of governmental agencies (State, County
and Shakopee Mdewakanton Sioux Community). The projects that are reflected in
year 2014 of the 2014-2018 CIP will be incorporated into the 2014 budget.
The improvements that are funded in full or partially by tax levies have a direct im-
pact on the level of property taxes payable in future years. Bond proceeds are uti-
lized to cashflow the project and debt levies are adopted to repay the debt service.
Actions by the school district and the county will also influence the level of taxes
through their annual levies and periodic referenda and bond issues.
Conclusion
The City Council should hear the staff report regarding the CIP. Following Council
questions to staff, the public hearing should be opened by motion and second and
remain so until all persons desiring to be heard have spoken. The public hearing
should be closed by motion and second, questions raised by the audience should
be answered. The Council should then deliberate and then dire�t staff to prepare a
resolution approving the 2014-2018 CIP and Street Reconstruction Plan as pre-
sented or with any recommended changes.
If appropriate the 2014-2018 CIP and Street Reconstruction Plan as proposed can
be approved.
ISSUES: An e-mail was submitted by resident David Herington requesting that the city coun-
cil consider adding the floating boardwalk once contemplated at White Tail Island in
2
the Deerfield area. Mr. Herington may be present at the hearing to address the
councii.
Following Council approval of the Capital Improvement Program, Engineering staff
will prepare a feasibility report (if applicable) for those projects identified for next
year. Adequate lead time is important for surveying, right-of-way acquisition and
engineering to obtain the best possible bids, which has generally occurred when the
City is able to put projects out for bid early in the year.
Subsequent years in the CIP are important from a planning perspective. Our objec-
tive in preparing the CIP has been to balance the tax impacts from year to year
while addressing infrastructure needs.
By approving the Street Reconstruction Plan as part of the Transportation Plan the
City Council wilt be able to issue Street Reconstruction bonds for these projects
should it desire. It should be noted that if within 30 days of the Public Hearing a
petition signed by at least 5% of the votes cast in the last municipal election is re-
ceived the City may only issue Street Reconstruction Bonds after approval of a ref-
erendum in accordance with State Statute. This does not affect the issuance of
429 Bonds for reconstruction projects. I
FINANCIAL In reviewing the draft 2014-2018 Capital Improvement Program, the Council should
IMPACT: consider the annual tax impact of the scheduled projects.
The major projects proposed for 2014 involving a propertjr 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 LakeO 700,000
Total $ 2, 950, 000
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 for major facility repairs in 2014 and $580,000 for equipment replacement
in 2018.
The following chart reflects all bonding requirements referenced in the CIP exce t:
• Bonding that may be presented to residents by referendum for community
park improvements (identified in the Park Equipment Replacement Plan)
beginning in 2020.
In addition, the chart does NOT include bonding that may be associated with large
projects that haven't been fully vetted such as:
3
• New water treatment facility (west side of city)
• Replacement of old maintenance shop
• Fire Station #3 (west side of city)
The chart also reflects the cumulative effect of new debt issued and the retirement
of existing debt. The top line is the resulting total debt balance at the end of the
year.
Rrojected Debt Batances
07.22.2013
560A ._... ___.. .. . _.. .. .
550A. ._...... __..... ........ .......... ....... .... .. ... . .. . . ..._.. . ........ ..
540.0 ..._. ....__ . .. __ .... . .... ..... . ....__ . . . . ____ ._.._.. .....
`i...,
��
a ...
O
� 530.0 Pay oH ED0. $8.8M ..... .._.__ ..... ... _... ..... ..... .
� (Escrow) in 2013
'� Pay off 2006A
(Escrow) i� 2014
5?_OA ......... ___ . ...... ....... . � ... . .....
StOA ...__. ...___..... �_��_� .
50A ._._... ...... .. .. .
� .. O1`� O . ` D. O ,�h Q ,�O Oy '1 Oy 0 O �9 �. D , y �. o , y 'L o . y 3
�'L� 'L 'D 'L "L 'L 1 `L `L `L 1 `L
J
L_ —+—Exisiing 6ebt �Cumm. CIP Debt —+—PrqeMed Debt ��New CIP Debt l
The followin chart reflects the chan in debt balance on a er ca ita basis:
Debt Per Capita
o sz,soo za,000 P
e ' 27,000 °
b $2,000 - . _ _ _ . _ ,.�"'� '
; 26,000 P
t $1,500 ___ . _.__... ___..._ _.__..::....---. u
� �►�"'�,,. _ .,,,,*„�,� 25,000 �
C $1,000 �"�Yf _.._...�. ___ __ 24,000 a
a ' 23,000 t
$500 - - -. ...._ ...._.__. _. _..___......__._..._� ........... ......_...........__... . _ ._
P '; 22,000 i
� $0 . 21,000 �
t .; z�12 _ 2013 . 2014 2QI5 20i6 . 2017 2018 2019 ��, 2020 2021 2022 2023 ��, ft
--µa DebtJCap'ta 2,036 2,598 1,5Q5 ! 2,769 1,6fiZ 1.6i6 L614 1,559 ', 1,495 1,444 1,300 1,272
—;�—Population Z3,Z9� 23,731 24,106 24,d81 24,856 25,231 25,606 � 25.951 � 26,356 26,731 27,i0b 27,481 �
Population growth based on 150 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 is reflected in the following table:
4
P Chan !n Debt Totals'
2014 y
2�194 2015 ' 2Q76 201T 2098 24�18
Debt:
Existing CIP (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 Le 112,656 300,166 471,715 382,480 607,075 659,942
ProJected Debt Levy
2015 ' 2014 2tI15 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 pay-
ments are eliminated. In the early 2000s, the level of bonding was tower 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 or-
der to address maintenance issues in a more realistic 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 proper-
ty tax l evy.
The debt associated with Market Referendum bonds which funded park improve-
ments and construction of the fire stations also incrementally increases each year.
The final payment for the park improvements occurs in 2017 and significantly de-
creases per the debt schedule.
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 bonds would result in an increased debt ser-
vice levy as noted in the table above.
Transqortation Plan
The Transportation Plan utilizes multiple funding sources to support roadway and
utility construction projects including Municipal State Aid, Street Oversizing and
Trunk Funds, Water Fund, Sewer Fund, Water Quality Fund, special assessments
and bond proceeds. Grant funding is pursued whenever possible. The City works
cooperatively with other agencies such as Scott County, MNDOT, and SMSC to co-
ordinate the timing and funding of these projects.
Eauipment Replacement Plan
The Equipment Replacement Plan (ERP) utilizes general tax levies to support re-
placement of the City's equipment and vehicle fleet. Prior CIPs reflected incremen-
tal annual increases over the program's 12-year term. With the pressure of levy lim-
its in 2014 and a strong fund balance, the property tax levy dedicated to the ERP
plan has been reduced in 2014 by $120,000. The tax levies in subsequent years
have also been adjusted.
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The ERP also includes annual transfers from the Water Fund, Sewer Fund and
Water Quality Fund. The transfers from the Water Fund and Sewer Funds are pe-
riodically increased because a significant portion of the equipment also serves the
Water and Sewer departments.
Funding for the replacement of fire trucks in 2018 and 2021 is assumed to be pro-
vided by issuing bonds or equipment certificates. For future CIPs, the City Council
should contemplate the funding philosophy associated with major replacements or
acquisitions such as building up a fund balance reserve, issuing debt or a combina-
tion of the two.
Park Eauipment Replacement Plan
The Park Equipment Replacement Plan (PERP) utilizes general tax levies to sup-
port the ongoing repairs and maintenance reflected in the General Fund Parks De-
partment budget. The PERP reflects incremental increases or decreases between
$15,000 and $115,000 for years 2014 through 2018 based on the current equip-
ment replacement philosophy. Staff, along with the Parks Advisory Committee, will
be conducting a Park Analysis and Sustainability Study to determine if the PERP
should be adjusted to meet changing demographics in the community.
Technoloav Plan
The Technology Plan (TP) identifies the existing inventory, acquisition date, life ex-
pectancy and vatue of hardware on a long term basis (10 years). The Plan also
identifies potential future investments in software.
The Technology Plan reflects $1.3 million in expenditures for years 2014 through
2021. This number includes approximately $460k for a new Financial System and
$60k for new property management software.
The Technology Plan utilizes multiple funding sources including contributions from
the Water Fund and Sewer Fund. The General Fund currently has funds allocated
for capital purchases in the Technology Department. Additional funds will need to
be budgeted using general tax levies.
Two years ago, Council members indicated that the use of General Fund reserves
should only be for major software purchases such as the Financial System, permit-
ting software, time tracking software, etc. The current Plan remains consistent with
those Council directives.
Facilities Manas�ement Plan
The Facilities Management Plan (FMP) identifies the existing inventory, installation
date, life expectancy and value of equipment on a long term basis (25 years) for all
of our facilities. The FMP provides a schedule for MAJOR repairs, replacements
and upgrades. It does not cover minor expenses for repairs and maintenance.
Those will continue to be funded through the operating budgets.
The FMP utilizes multiple funding sources including general tax levies, periodic
transfers from the General Fund, annual transfers from the Water Fund and Sewer
Fund and bond proceeds.
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Current and Proaosed Rates
The following table shows the current and proposed rates which are the basis for
the revenues in each of the water, sewer and water quality operating plans. The
rates were adjusted per Council directive to mirror the targeted minimum fund bal-
ance reserves.
, Z013 2Q14 ZO15 2016 2017 �18
Water <25000 $ 3.40 $ 3.65 ; $ 3.90 $ 3.98 ! $ 4.06 ' $ 4.21
_ _ _ : _
Water>25000 $ 4.69 $ 5.03 ' $ 5.37 $ 5.48 ' $ 5.59 ' $ 5.80
Sewer-MCES $ 2.11 $ 2.11 '$ 2.16 $ 2.21 ,$ 2.26 $ 2.31
_ _
Sewer-City $ 1.96 $ 1.96 $ 2.00 $ 2.04 '$ 2.08 ': $ 2.12
Storm Water $'' 11.25 $ 13.25 $ 13.50 $ 13.75 $ 14.00 ,$ 14.25
CFAC-Water $ S.flO $ 5.00 $ 5.00 $ 5.00 $ 5.00 $ 5.00
CFAGSewer $ 5.W $ 5.00 '$ 5.00 $ 5.00 $ 5.00 !$ 5.00
Approval of the CIP does not constitute final project approval. All of the projects
included in the CIP will come before the City Council several times prior to final ap-
proval. All future bonding decisions are approved by the City Council, as well.
ALTERNATIVES: The following alternatives are available to the City Council:
1. Direct staff to prepare a resolution approving the 2014-2018 CIP and Street Re-
construction Plan as presented.
2. Direct staff to prepare a resolution approving the 2014-2018 CIP and Street Re-
construction Plan with recommended changes. �
RECOMMENDED Alternatives #1 or 2
MOTION:
REPORTS 1. 2014-2018 CIP Documents
ATTACHED
7
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v � 4646 Dakota Street SE
Prior Lake, MN 55372
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PLANNING COMMISSION
CITY OF PRIOR LAKE, MINNESOTA
RESOLUTION N0.13-XX PC
RESOLUTION OF THE CITY OF PRIOR LAKE PLANNING COMMISSION FINDING THAT THE CAPITAL
IMPROVEMENTS IDENTIFIED IN THE 20142018 CAPITAL IMPROVEMENT PROGRAM ARE IN COMPLIANCE
WITH THE COMPREHENSIVE MUNICIPAL PLAN.
WHEREAS, the City staff has prepared and presented to the Planning Commission the 2014-2018 Capital
Improvement Program hereinafter "CIP;" and
WHEREAS, pursuant to Minn. Stat. §462.356, Subd 2 after a comprehensive municipal plan or section
thereof has been recommended by the planning agency and a copy filed with the governing body, no publicly owned
interest in real property within the municipality shall be acquired or disposed of, nor shall any capital improvement be
authorized by the municipality or special district or agency thereof or any other political subdivision having jurisdiction
• within the municipality until after the planning agency I�as reviewed the proposed acquisition, disposal, or capital •
improvement and reported in writing to the goveming body or other special distnct or agency or political subdivision
concemed, its findings as to compliance of the proposed acquisition, disposal or improvement with the
comprehensive municipal plan..
NOW, THEREFORE, BE IT RESOLVED by the Planning Commission finds that the capital improvements
identified in the CIP are in compliance with the comprehensive municipal plan.
Pass and adopted this 5� day of August, 2013.
Jeff Phelan, Commission Chair
ATTEST:
Dan Rogness, Community & Economic Development Director
Phone 952.447.9800 / Fax 952.447.4245 / wtivw.cityofpriorlake.com
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