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Home My WebLink About01(A) - Draft 2021-2025 Capital Improvement Program Part 2 of 2 ReportFor the Water Fund: For the Sewer Fund: Water Fund 2020 2021 2022 2023 2024 2025 Cash by Purpose For future capital improvements 1,647,067 1,804,019 1,810,727 823,584 884,835 1,049,158 For following year pay-go capital 2,068,750 931,500 949,240 2,295,730 1,310,979 1,261,640 For private streets replacement 5 - 188,400 228,336 269,869 313,064 357,987 For 3-months of operating cash 639,290 663,903 683,239 697,789 712,583 727,735 For following year debt service 4 735,350 747,525 779,100 784,300 789,000 791,950 Ending Cash 5,090,457 4,335,346 4,450,642 4,871,272 4,010,460 4,188,469 Total Average Number of Customer Bills 9,377 9,502 9,637 9,772 9,897 10,022 Total Water Volume Billed (1,000 of gallons)653,489 667,676 677,396 687,116 696,116 705,116 High Volume Customer (78,000 gallons)4.9%5.4%1.5%1.5%1.5%1.5% Medium Volume Customer (18,000 gallons)4.6%-12.0%1.5%1.5%1.5%1.5% Low Volume Customer (8,000 gallons)4.2%-1.5%1.5%1.5%1.5%1.5% Average Annual % Change in Water Bill for Billing Period 1 Sewer Fund 2020 2021 2022 2023 2024 2025 Cash by Purpose For future capital improvements 63,396 1,587,714 1,618,614 1,498,053 1,378,310 1,270,677 For following year pay-go capital 1,499,750 1,020,200 875,240 1,148,230 1,209,979 1,261,096 For private streets replacement 5 - 188,400 228,336 269,869 313,064 357,987 For 3-months of operating cash 766,260 785,357 887,867 932,416 979,227 1,028,929 For following year debt service 169,650 274,332 264,700 262,050 259,200 254,825 Ending Cash 2,499,055 3,856,003 3,874,757 4,110,618 4,139,779 4,173,513 Total Average Number of Customer Bills 9,224 9,349 9,484 9,619 9,744 9,869 Total Sewer Volume Billed (1,000 of gallons)545,433 552,933 561,033 569,133 576,633 584,133 High Volume Customer (47,000 gallons)14.1%10.6%2.0%2.0%2.0%2.0% Medium Volume Customer (12,000 gallons)12.5%-11.4%2.0%2.0%2.0%2.0% Low Volume Customer (7,000 gallons)11.2%-0.7%2.0%2.0%2.0%2.0% Average Annual % Increase for Fees and Charges 1, 4 Stormwater Fund 2020 2021 2022 2023 2024 2025 Cash by Purpose For future capital improvements 667,498 601,767 769,343 709,237 769,816 612,319 For following year pay-go capital 325,000 292,000 60,000 295,000 183,000 407,500 For private streets replacement 3 - - - - - - For 3-months of operating cash 186,173 187,103 191,013 195,008 199,092 203,266 For following year debt service - - - - - - Ending Cash 1,178,671 1,080,870 1,020,356 1,199,246 1,151,908 1,223,085 Total Average Number of Residential Equivalent Units Billed 9,225 9,350 9,485 9,620 9,745 9,870 Per Residential Equivalent Unit 10.0%1.0%1.0%1.0%1.0%1.0% Average Annual % Increase for Fees and Charges 2020 Budget: Proposed for Year 2021: 2020 Budget: Proposed for Year 2021: Water Services Sewer Services Capital Improvement Plan City of Prior Lake, Minnesota Contact 2021 2025thru Department Fire Description Engine #9221 was purchased in 1996. Per the City’s Equipment Replacement Plan, this vehicle was scheduled to be replaced after 25-years of service and has been planned for replacement since the city’s 2011-2022 adopted Capital Improvement Program(CIP). As was the council’s original direction when the replacement plan was created, we have retained this piece of equipment to garner the longest possible useful life. The Equipment Replacement Plan was created as a budgeting tool to assist in financial planning for major expenditures and to help moderate the annual fleet replacement budget. The goal is to replace equipment in a timely and cost-effective manner. This engine is currently 24-years old (in 2020) and in need of replacement. The Fire Department found with the last engine replacement, that the build time took 20 months which extended the service life of engine #9220 to 27 years. The Fire Department expects a similar build time for this replacement which would extend the service life of engine #9221 to 27 years. Project #FD-9221 Justification As the needs of the fire department have grown over the years, so has the equipment they need to do their jobs. This has required that additional equipment be added to the existing engine. The weight of the truck has been impacted as a result and there has been a history of the brakes being undersized for the current weight. In addition, due to the age of the truck it is becoming increasingly difficult to find parts to perform maintenance which causes extended out of service time. The replacement engine will be designed as a rescue engine which allows for additional equipment to be carried. This allows the Fire Department to perform several tasks that would normally require several other vehicles and manpower to facilitate. This is the same design that was used in the replacement of engine #9220 in 2018 and has been found to be extremely efficient. The engine is and has been part of the Capital Improvement Program for some time. As directed by previous city councils the staff has sought to retain equipment as long as possible before replacing. That is why we have retained this equipment for 25 rather than 20 years. We have previously saved money by refurbishing Fire vehicles. This practice was evaluated for this equipment but is not feasible since the chassis, transmission, drive train and engine would have to be upgraded to provide the needed carrying capacity. Budget Impact/Other The annual adopted Capital Improvement Program(CIP) has included the City's plan to fund this equipment purchase with bond proceeds. Useful Life 25 years Project Name 1996 Peterbilt Pumper Category Equipment: FD-Apparatus Type Equipment Total Project Cost:$740,000 Total20212022202320242025Expenditures 740,000740,000Equip/Vehicles/Furnishings 740,000 740,000Total Total20212022202320242025Funding Sources 740,000740,000410-Equip. Replacement Fund 740,000 740,000Total Friday, May 29, 2020Page 1Produced Using the Plan-It Capital Planning Software Andy Brotzler Cathy Erickson Kelly Horn 2021-2025 CAPITAL IMPROVEMENT PROGRAM Transportation Plan and Utility Funds August 3, 2020 2021-2025 CIP Schedule June 15 -Capital Plans Review I •Equipment •Park Equipment •Facilities •Technology Plan August 3 -Capital Plans Review II •Utility Funds –Financial Plans •Transportation Plan •Financial Impacts November 16 -Public Hearing and Adopt 2021-2025 CIP 2021-2025 CIP Schedule •Utility Study Completed by Northland Public Finance in 2019 •Serves as a guide for the financial management of the water and sanitary sewer systems 2021-2025 CIP Schedule Utility Funds Financial Management Plan 5 Study Objectives: Utility Funds Financial Management Plan 6 Study Objectives: Utility Funds Financial Management Plan 7 •67% Water Costs and 47% of Sewer Costs are Fixed (not dependent on water & sewer usage/volume) •Only 10% of Water and 11% of Sewer Revenues are derived from fixed fees/charges Utility Funds Financial Management Plan 8 Study Provided Base Rates Targets: Utility Funds Financial Management Plan 9 Water Fund: Utility Funds Financial Management Plan 10 Sewer Fund: Water Fund Sample Water Bill 11 Water Fund Financial Management Plan 12 Water Fund 2020 2021 2022 2023 2024 2025 Cash by Purpose For future capital improvements 1,647,067 1,804,019 1,810,727 823,584 884,835 1,049,158 For following year pay-go capital 2,068,750 931,500 949,240 2,295,730 1,310,979 1,261,640 For private streets replacement 5 - 188,400 228,336 269,869 313,064 357,987 For 3-months of operating cash 639,290 663,903 683,239 697,789 712,583 727,735 For following year debt service 4 735,350 747,525 779,100 784,300 789,000 791,950 Ending Cash 5,090,457 4,335,346 4,450,642 4,871,272 4,010,460 4,188,469 Total Average Number of Customer Bills 9,377 9,502 9,637 9,772 9,897 10,022 Total Water Volume Billed (1,000 of gallons)653,489 667,676 677,396 687,116 696,116 705,116 High Volume Customer (78,000 gallons)4.9%5.4%1.5%1.5%1.5%1.5% Medium Volume Customer (18,000 gallons)4.6%-12.0%1.5%1.5%1.5%1.5% Low Volume Customer (8,000 gallons)4.2%-1.5%1.5%1.5%1.5%1.5% Average Annual % Change in Water Bill for Billing Period 1 Sewer Fund Sample Sewer Bill 13 Sewer Fund Financial Management Plan 14 Sewer Fund 2020 2021 2022 2023 2024 2025 Cash by Purpose For future capital improvements 63,396 1,587,714 1,618,614 1,498,053 1,378,310 1,270,677 For following year pay-go capital 1,499,750 1,020,200 875,240 1,148,230 1,209,979 1,261,096 For private streets replacement 5 - 188,400 228,336 269,869 313,064 357,987 For 3-months of operating cash 766,260 785,357 887,867 932,416 979,227 1,028,929 For following year debt service 169,650 274,332 264,700 262,050 259,200 254,825 Ending Cash 2,499,055 3,856,003 3,874,757 4,110,618 4,139,779 4,173,513 Total Average Number of Customer Bills 9,224 9,349 9,484 9,619 9,744 9,869 Total Sewer Volume Billed (1,000 of gallons)545,433 552,933 561,033 569,133 576,633 584,133 High Volume Customer (47,000 gallons)14.1%10.6%2.0%2.0%2.0%2.0% Medium Volume Customer (12,000 gallons)12.5%-11.4%2.0%2.0%2.0%2.0% Low Volume Customer (7,000 gallons)11.2%-0.7%2.0%2.0%2.0%2.0% Average Annual % Increase for Fees and Charges 1, 4 Stormwater Fund Sample Sewer Bill 15 2020 Total Fee 16.57 2021 Total Fee 16.74 % Increase 1.0% Stormwater Customers Stormwater Fund Financial Management Plan 16 Stormwater Fund 2020 2021 2022 2023 2024 2025 Cash by Purpose For future capital improvements 667,498 601,767 769,343 709,237 769,816 612,319 For following year pay-go capital 325,000 292,000 60,000 295,000 183,000 407,500 For private streets replacement 3 - - - - - - For 3-months of operating cash 186,173 187,103 191,013 195,008 199,092 203,266 For following year debt service - - - - - - Ending Cash 1,178,671 1,080,870 1,020,356 1,199,246 1,151,908 1,223,085 Total Average Number of Residential Equivalent Units Billed 9,225 9,350 9,485 9,620 9,745 9,870 Per Residential Equivalent Unit 10.0%1.0%1.0%1.0%1.0%1.0% Average Annual % Increase for Fees and Charges Combined Impact –All Funds Sample Bill 17 Customers High Volume Customer Medium Volume Customer Low Volume Customer Gallons Water Billed for Billing Period 78,000 18,000 8,000 Gallons Sewer Billed for Billing Period 47,000 12,000 7,000 Stormwater REU 1 1 1 2020 Capital Facility Charge 10.00 10.00 10.00 Water 497.63 93.40 42.90 Sewer 185.33 49.18 29.73 Stormwater 16.57 16.57 16.57 Total Fee 709.53 169.15 99.20 2021 Base Fee - Water & Sewer 37.00 37.00 37.00 Capital Facility Charge - - - Water 509.88 66.64 27.20 Sewer 193.45 31.00 17.50 Stormwater 16.74 16.74 16.74 Total Fee 757.07 151.38 98.44 % Increase 6.7%-10.5%-0.8% Multi-Family Residential - Water and Sewer ◼Usage Rates –Water: $5.00 per 1,000 gallons –Sewer: $3.50 per 1,000 gallons ◼Base Rates –Varies; Dependent on the number of multi-family units on property Private Street Utility Surcharge Utility Financial Plans – Next Steps September 2020 Council Approves Preliminary Utility Fund Budgets December 2020 Council Approves 2021 Rate Structure and Utility Rates 1st Quarter 2021 Implement New Rate Structure and Utility Rates 3rd Quarter 2021 Implement New Utility Billing Software System Transportation Plan Transportation Plan Map Street Overlay Plan 23 •Assumes tax levy per current CIP •No annual project for 2021-2023 to build fund balance 2020 2021 2022 2023 2024 2025 PIR Fund (F450) Use of Funds: Street Overlay Project 758,000$ -$ -$ -$ 300,000$ 500,000$ Transfer to Debt Service Funds 280,000 287,000 319,000 239,000 131,000 48,000 Total Use of Funds 1,038,000$ 287,000$ 319,000$ 239,000$ 431,000$ 548,000$ Sources of Funds: Special Assessment Revenue 190,000 173,000 166,000 126,000 87,000 61,000 Bond Proceeds 258,000 163,200 50,000 90,000 Tax Levy 80,000 120,000 155,000 190,000 225,000 240,000 Interest Earnings 7,000 1,000 4,000 4,100 5,500 4,400 Total Source of Funds 535,000$ 457,200$ 325,000$ 320,100$ 367,500$ 395,400$ Change in Fund Balance (503,000) 170,200 6,000 81,100 (63,500) (152,600) Beginning Fund Balance 559,000$ 56,000$ 226,200$ 232,200$ 313,300$ 249,800$ Ending Fund Balance 56,000$ 226,200$ 232,200$ 313,300$ 249,800$ 97,200$ Financial Impacts Annual projected total CIP tax levy by component 2021 2022 2023 2024 2025 Equipment Revolving Fund 650,000 700,000 750,000 800,000 850,000 Revolving Park Equip Fund 375,000 405,000 440,000 485,000 535,000 Facilities Management Fund 80,000 105,000 140,000 165,000 190,000 PIR Fund 120,000 155,000 190,000 225,000 240,000 Debt Service 3,559,808 3,769,033 3,767,796 3,741,240 3,895,099 Total CIP Tax Levies 4,784,808 5,134,033 5,287,796 5,416,240 5,710,099 2021-2025 CIP Tax Levies: Projected CIP Tax Levy Debt Projection 25 Debt Projection 26 Debt Projection 27 28 The tax levy and debt service impacts of the CIP have been incorporated into the long- range financial plan. Next steps: •Proposed utility rates incorporated into 2021 Preliminary Budgets •Budget Workshop –September 8, 2020 •September 21 –Adopt Preliminary Budgets and Preliminary Tax Levy •CIP Public Hearing –November 16, 2020 Council Discussion 29 Questions/Discussion