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Home My WebLink About9E 1 - 2000-2004 Capital improvement Program STAFF AGENDA REPORT MEETING DATE: AGENDA #: PREPARED BY: AGENDA ITEM: MAY 17, 1999 9 E (1) d'-l RALPH TESCHNER, FINANCE DIRECTOR -, CONSIDER APPROVAL OF RESOLUTION 9~ APPROVING THE 2000-2004 CAPITAL IMPROVEMENT PROGRAM (CIP) DISCUSSION: History Annually the City prepares a capital improvement program (CIP) , The CIP designed to identify infrastructure improvements and funding sources therefore which 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, Enclosed is the draft copy of the 2000-2004 Capital Improvement Program for your review, Maps of the project areas will be distributed Monday night. 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 attached is a memo from Don Rye conveying the recommendation of the Planning Commission who reviewed the draft CIP at their May 10th meeting, Current Circumstances The City Council conducted a workshop to discuss the draft CIP on May 3, 1999, Council and Staff reviewed the proposed funding levels and the improvement project list,for each year and the major changes within the revolving equipment fund matrix schedule, Discussion centered around the priority, timing and financing mix of three important intersections along TH13 i,e" Boudins/Commerce, l50th Street and CSAH 23, Council agreed with the proposed schedule involving these three major intersections, However, the Council consensus was not to include the frontage road concept along CSAH 42 in the CIP at this time because of the following four considerations; 1.) Prohibitive cost of the improvement. 16200 Eagle Creek Ave. S.E., Prior Lake, Minnesota 55372-1714 / Ph, (612) 447-4230 / Fax (612) 447-4245 AN EQUAL OPPORTU:"iITY EMPLOYER FISCAL IMPACT: H:\CIP\CIPAGEN,DOC 2) Commercial development of the area may some day result in a private buyout and development in the future, 3) The possibility that in the future a private-public partnership may occur that would share in the costs of such a frontage road improvement project. 4) Local area businesses had not demonstrated a strong support for this secondary road access as very few attended the informational meetings or provided feedback. At the conclusion of the workshop the Council directed Staff to place the 2000-2004 Capital Improvement Program on the May 17th City Council Agenda for public input and if appropriate, adoption. Issues 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 2000, Those improvements selected for bonding will affect the property taxes payable in 2001. 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 should be eliminated now so they do not generate public expectation and also to avoid unnecessary City effort and expense, Conclusion At the meeting the appropriate department heads will be present to answer questions about the Capital Improvement Program. I will provide a cursory overview of the program and its contents especially with respect to those improvements identified for 2000, Following Council approval of the Capital Improvement Program, Engineering will prepare a feasibility report for those projects identified for next year (see agenda report 9 E (2), 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 2000-2004 Capital Improvement Program, the Council should consider the annual tax impact of the scheduled projects. While state imposed levy limits are again in effect for payable 2000, debt levies associated with our capital improvement program are exempt. The City Council's self imposed zero percent tax increase which is more 2 ALTERNATIVES: H:\CIP\CIPAGEN.DOC restrictive than the statewide levy limits substantially limits the number and timing of tax funded projects in the CIP program, The major projects proposed for 2000 which involve a project tax levy are listed below along with their respective tax impact: Project Description Project Levy City Tax Impact $ % $4,39 0.52% $17.48 2,09% Fish Pt RdlFairlawn Sh,Tr Overlay Oak RidgelPixie Pt Reconstruction $180,000 $717.000 TOTALS $897,000 $21.87 2,61% 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 $150,000, This typical value has been utilized for purposes of calculating the following tax impact. (A 1999 base tax of $836.33 [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 elP. Also this model assumes an annual 2% tax capacity valuation growth.) Project Year and Levy Amount Tax Impact $ % $21.87 2.61 $18,02 2.10% $13.16 1.50% $16.40 1,85% $16,00 1.77% 2000 2001 2002 2003 2004 $897,000 $751,000 $560,000 $711,000 $708,000 The annual tax impact is fairly balanced over the course of the ClP, with the largest variance occurring in year 2000, As to the Equipment Matrix, the annual incremental property tax increases of $10,000 have been eliminated until the year 2004 as a result of the Council's efforts to lower property taxes, The Equipment Matrix also has, as one of its funding sources, an annual transfer of $50,000 from the Enterprise Fund that is adjusted semi-annually because a significant portion of the equipment serves the Water and Sewer departments, 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, 3 2. Amend the 2000-2004 Capital Improvement Program as per Council determination, 3, Approve the proposed 2000-2004 Capital Improvement Program as submitted, RECOMMENDATION: Staff recommends 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 return to the Council for authorization to begin the feasibility study for those projects scheduled for 2000, RECOMMENDED MOTION: Attachments: Motion Impro~ Res tion 99-xx Approving the 2000-2004 Capital submitted, REVIEWED BY: Approving the 2000-2004 Capital Improvement Program H:\CIP\CIPAGEN.DOC 4 RESOLUTION 99-~ y~ RESOLUTION APPROVING THE 2000-2004 CAPITAL IMPROVEMENT PROGRAM MOTION BY: SECOND BY: WHEREAS, 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 WHEREAS, 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, WHEREAS, The capital improvement program is a flexible planning document that attempts to balance the financial resources of the City with its needs; and WHEREAS, The establishment of a capital improvement program will provide appropriate information to manage capital change within the City of Prior Lake; and WHEREAS, It is intended for the capital improvement program to be established for a period of five (5) years and to be updated annually, NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, that the 2000-2004 Capital Improvement Program is hereby approved, Passed and adopted this 17th day of May, 1999, YES NO Mader Kedrowski Petersen Schenck Wuellner Mader Kedrowski Petersen Schenck Wuellner {Seal} City Manager City of Prior Lake 16200 Eagle Creek Ave. S.L Prior Lake, Minnesota 55372-1714 / Ph, (612) 447-4230 / Fax (612) 447-4245 AN EQUAL OPPORTUNITY E:V1PLOYER H:\C1P\CIPOORES.DOC MEMORANDUM May 12, 1999 To: Frank Boyles From: Don Rye Subject: Planning Commission Review of2000-2004 CIP On Monday, May 10, the Planning Commission reviewed the draft of the 2000-2004 CIP, They did not have comments on any of the proposed projects but they did feel that there should be money included in the CIP for the next 5 years to assist in Downtown Redevelopment activities, They did not indicate specific projects nor did they indicate a dollar amount but felt quite strongly that some money needed to be earmarked for Downtown to insure that recommendations of the Downtown Redevelopment Study are implemented, 16200 Eagle Creek Ave, S.E., Prior Lake, Minnesota 55372-1714 / Ph, (612) 447-4230 / Fax (612) 447-4245 AN EQUAL OPPORTUNITY EMPLOYER