HomeMy WebLinkAbout8A - 2008-2012 CIP
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MEETING DATE:
AGENDA #:
PREPARED BY:
AGENDA ITEM:
DISCUSSION:
CITY COUNCIL AGENDA REPORT
MAY 21,2007
8A
Ralph Teschner, Finance Director
CONDUCT INFORMATIONAL HEARING AND CONSIDER APPROVAL OF A
RESOLUTION APPROVING THE 2008 - 2012 CAPITAL IMPROVEMENT
PROGRAM (CIP)
Introduction
This agenda item is an informational hearing on the proposed projects within
the 2008-2012 Capital Improvement Program. A "public hearing" is not
required by state statute, however the aforementioned hearing will provide our
residents an opportunity to make recommendations and comment on particular
projects. At the conclusion, a resolution adopting the 2008 CIP may be
considered by the City Council.
Historv
Annually the City prepares a capital improvement program (CIP). The CIP is
designed to identify infrastructure improvements and funding sources therefore
that are necessary as a result of primarily two factors; community growth and
infrastructure maintenance and replacement.
Such projects include City initiated improvements, county and state road
improvements and improvements requested by developers. In some cases
they involve financial responsibility on behalf of Prior Lake, while in others they
may not. In addition, an Equipment Matrix is included which identifies the City's
equipment needs and establishes a regular replacement schedule.
Earlier a draft copy of the 2008-2012 Capital Improvement Program was
distributed for your review so you would have more opportunity to become
familiar with the proposed projects. Also, a presentation was made to the
Council at its last council workshop meeting. Within the CIP are condensed
project summary sheets (see inserts entitled "Capsule Project Summary") that
present a list of projects by year along with a financing source recap, the City's
specific share of the project cost and the estimated tax impact of each year's
projects. This capsule summary should be helpful for the Council to refer back
and forth between years as a quick reference guide.
Also included is a condensed financial analysis entitled "Financing Funds
Projection" that matches revenue sources with the five year CIP construction
demands showing the beginning and the ending position of those capital funds
which provide the underlying financing of the projects.
On March 26, 2007 the Prior Lake Planning Commission reviewed the 2008-
2012 Capital Improvement Program. The Commission did not suggest any
changes or revisions to the draft CIP. The Commission found that the CIP was
consistent with the goals and objectives of the City of Prior Lake
www.cityofpriorlake.com
Phone 952.447.9800 / Fax 952.447.4245
Comprehensive Plan.
On May 7,2007 the Council had the opportunity to review, discuss and provide
direction to Staff on specific items the Council wished to change.
There was consensus by the Council with respect to the 2008 proposed
projects with the program improvements for the remaining years supported by
the Council as a whole.
At the workshop individual council members identified projects to be
considered for inclusion in the Capital Improvement Program including:
o Weed control for Little Prior
o Outdoor water park
o Kop Farm improvements
o Temporary Senior Center
These items are not included in the proposed CIP because of funding
restrictions.
Current Circumstances
It is important for the Council to recognize that the document is a flexible
planning tool that is affected by the actions of a number of governmental
agencies (State, County and Shakopee Mdewakanton Dakota Community).
The Council should critically review those projects proposed for 2007. Those
improvements selected for bonding will affect the property taxes payable in 2009.
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. Those programs which are not deemed to be of high priority
(particularly in 2008) should be eliminated now so they do not generate public
expectation and also to avoid unnecessary City effort and expense.
ISSUES:
Historically the TH13 intersections have been a high priority of the Council for
obvious reasons. However, due to the commitment of our future municipal
state aid funds for downtown redevelopment and major county road
cooperative projects involving CSAH 12, 21 and 42 and the general lack of
state funding the remaining TH 13 intersection improvements such as at
Oakland Beach, and 150th Street and CSAH 21 corridor improvements west of
Main Avenue are presently unfunded. The primary reason for the delay to
complete those major improvement projects identified above is that advanced
borrowing of our annual MSAS allotment is no longer allowed. However, in
2008 we will resume our MSA funding which is proposed to be allocated for the
northerly extension of CSAH 21.
Another primary CIP concern is the timing of the CIP proposed future parks
referendum. Until there is a concerted effort from the vested interests i.e.
PLAY, and the various athletic associations, and depending upon final
recommendations from the Park Advisory Committee regarding the Master
Park Plan (MPP) and the incorporation of the Senior/Community Center, the
referendum remains in 2010. However, it could easily be modified if community
support is generated earlier or if it conflicts with referendums of other entities.
Following Council approval of the Capital Improvement Program, Engineering
staff will prepare a feasibility report for those projects identified for next year.
FISCAL IMPACT:
ALTERNATIVES:
Adequate lead time is 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 planning perspective.
Our objective in preparing the CIP has been to balance the tax impacts from
year to year while addressing infrastructure needs.
In reviewing the draft 2008-2012 Capital Improvement Program, the Council
should consider the annual tax impact of the scheduled projects. While state
levy limits could be imposed in the future, a special exception for our debt
levies associated with capital improvement program financing has always been
allowed.
The major project proposed for 2008 involving a property tax levy (payable
2009) is listed below along with its tax impact:
City Tax ImDact*
$ %
Brooksville Hills Street Reconstruction mmm~~?Q,QQQmJm~14~4Qm' mm1~??~mm'
Listed below is a year-by-year tax recap of all the street reconstruction
projects. The Scott County Assessor has estimated that the average Prior
Lake market value of a home is nearly $300,000. This typical value has been
utilized for purposes of calculating the following tax impact.
Proiect Year and Levv Amount
Tax ImDact
$ %
$14.40 1.57%
$14.70 1.58%
$17.10 1.81%
$14.40 1.49%
$5.10 0.52%
2008*
2009
2010
2011
2012
$950,000
$985,000
$1,175,000
$1,020,000
$375,000
*(A 2007 base tax of $918.15 [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.)
As to the Equipment Matrix, the property tax experiences semi-annual $10,000
step increase over the matrix's 12 year term. The Equipment Matrix also has,
as one of its funding sources, an annual transfer of $80,000 from the
Enterprise Fund that is adjusted semi-annually as well because a significant
portion of the equipment serves the Water and Sewer departments.
The following alternatives are available to the City Council:
1. Approve the proposed 2008-2012 Capital Improvement Program as
submitted.
RECOMMENDED
MOTION:
2. Provide direction to the staff to modify the proposed program to
mitigate annual tax increases while insuring appropriate maintenance
of public infrastructure.
3. Amend the 2008-2012 Capital Improvement Program as per Council
determination.
Alternative #1.
1. A Resolution Approving the 2008-2012 Capital Improvement Program.
MOTION BY:
WHEREAS,
WHEREAS,
WHEREAS,
WHEREAS,
WHEREAS,
WHEREAS,
4646 Dakota Street S.E.
Prior Lake, MN 55372-1714
RESOLUTION 07 -xx
RESOLUTION APPROVING THE
2008-2012 CAPITAL IMPROVEMENT PROGRAM
SECOND BY:
The purpose of a Capital Improvement Program is to protect the
infrastructure of the City of Prior Lake by establishing a replacement plan for
existing infrastructure and to identify those improvements necessary to
accommodate the growth of the community; and
An Equipment Matrix has been incorporated into the Capital Improvement
Program which is intended to identify the City's equipment needs and
provide a regular replacement schedule; and
The Capital Improvement Program is a flexible planning document that
attempts to balance the financial resources of the City with its needs; and
The establishment of a Capital Improvement Program will provide
appropriate information to manage capital change within the City of Prior
Lake; and
It is intended for the Capital Improvement Program to be established for a
period of five (5) years and to be updated annually; and
On May 21, 2007 the City Council of Prior Lake conducted an informational
hearing on the 2008 Capital Improvement Program and offered opportunity
for public testimony on the capital spending priorities of the City Council.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE that:
1. The recitals set forth above are incorporated herein.
2. The 2008-2012 Capital Improvement Program is hereby approved.
Passed and adopted this 21st day of May, 2007.
{Seal}
H:ICIPICIP08res.doc
YES
NO
Haugen
Erickson
Hedberg
LeMair
Millar
Haugen
Erickson
Hedberg
LeMair
Millar
City Manager
City of Prior Lake
www.cityofpriorlake.com
Phone 952.447.9800 / Fax 952.447.4245