Loading...
08-28-2018 CCM Worskshop (CIP Plan) HUTCHINSON CITY COUNCIL REVIEW OF 2019 PRELIMINARY CAPITAL IMPROVEMENT PLAN MINUTES TUESDAY, AUGUST 28, 2018, AT 4:00 PM CITY CENTER – COUNCIL CHAMBERS 1. Call to Order Mayor Forcier called the workshop to order at 4:10 p.m. Members present included Mary Christensen, Steve Cook and John Lofdahl. Member absent was Chad Czmowski. Others present were Matt Jaunich, City Administrator and other city directors. REVIEW OF 2019 PRELIMINARY CAPITAL IMPROVEMENT PLAN 2. 2019 Preliminary Capital Improvement Plan Matt Jaunich, City Administrator, presented before the Council. Mr. Jaunich reviewed the purpose of a capital improvement plan and the planning that goes into it. The planning process provides city staff and Council with a framework to make decisions regarding current and future city needs considering the city’s financial capability. Capital planning enables the City to maintain a stable property tax rate, prevent peaks and valleys in its debt retirement program and establish and thereafter improve its credit rating. The CIP Plan should be used as a goal, priority and vision-setting tool. Mr. Jaunich also reviewed how the CIP Plan is built which includes individual City Council goals and collective Council goals; citizens/business/user feedback to elected officials (needs, wants, desires of the community); City staff long-term maintenance and replacement schedules; and state/federal mandates. Mr. Jaunich began an overview of the five year capital plan document. The proposed plan is estimated at $52.23 million. The Plan is approximately $8.15 million larger than last year’s five- year plan. The plan has an average CIP cost of $10.4 million. 2019’s $12.7 million CIP cost currently accounts for approximately 25-30% of all budgeted expenses. For comparison purposes, this year’s (2018) general fund budget is $12.86 million. This plan includes costs for a new police station. Mr. Jaunich reviewed that the plan is divided into infrastructure at $26.35 million; Park & Rec at $2.31 million; Enterprise Funds at $9.06 million; Public Works at $2.27 million; Public Safety at $11.22 million and General Government at $1.01 million. The make-up of the CIP includes: New Debt: $19.62 million (amount of money that we need to borrow to pay for capital projects); Aid/Grants: $5.26 million; Enterprise Funds: $11.60 million; Taxes: $10.04 million; Special Assessments: $5.30 million; Special Funds/Reserves: $399,980. CIP funding sources for general fund projects include the General Fund from the Facility Improvements (Capital Improvements Fund and $700,000 of LGA is dedicated annually); Fleet & Equipment (Equipment Replacement Fund, General Fund – annual transfer of $225,000, current funding is not adequate for “small” and “heavy” fleet needs, additional funding source of about $384,000/year is needed); and Other Capital Needs (department budgets – tax levy, grants or donations, and other city funding). Enterprise fund projects are covered by cash flow from operations driven by user revenue and cash reserves. Infrastructure improvements debt are covered by GO special assessment improvements bonds, special assessment, municipal state aid for streets, grants, enterprise fund contributions and other city funding from Capital Projects and Community Improvement. Capital project costs and funding is reviewed by the Resource Allocation Committee. The Capital Projects Fund funding sources come from LGA, bonding dollars and grants. The use of these funds are for general fund capital improvements included in the Facility Plan, miscellaneous infrastructure maintenance such as trails, sidewalks, parking lots, street lights, sealcoating, etc., and other projects approved by the City Council. The 2017 year- end unreserved cash balance is $415,580 from this fund. The Community Improvement Fund funding sources come from retired debt service funds and donations. The use of these funds are for City Council approved projects and Public Arts Commission & other public arts projects. The 2017 year-end unreserved cash balance is $480,636 from this fund. The Public Sites Fund funding sources come from park dedication fees, donations, grants and rent on agricultural land. The use of these funds are for parkland improvements, tree development, arts, and City Council approved projects. The 2017 year-end unreserved cash balance is $114,359 from this fund. Mr. Jaunich noted where the proposed 2019 CIP monies are going to. They include $8.05 million th for infrastructure (South Central Drainage Project, South Grade Road and Trail, 5 Avenue SW/SE, Linden Avenue SW, TDK/Uponor public road, LED light retrofit and other miscellaneous street project; $641,000 for Park & Rec (vehicles, North Park tennis courts and library repairs); $2.40 million for Enterprise Funds (Creeksdie facility/equipment, water/sewer/wastewater/storm water improvements and equipment); $111,500 for Public Works (airport mower/tractor, cemetery, street vehicles); $1.35 million for Public Safety (new police station, police vehicles, building inspections vehicles); $150,000 for General Government (interpretive signage and City Center upgrades). Mr. Jaunich then reviewed where the proposed 2019 CIP monies are coming from. They include $3.5 million from New Debt; $2.5 million from Aid/Grants; $2.81 million from Enterprise Funds; $2.25 million from Taxes; $1.3 million from Special Assessments; and $350,000 from Special Funds/Reserves. Mr. Jaunich reviewed the five components of the Plan which include the fleet committee, facilities committee, Creekside, Resource Allocation Committee and General. Mr. Jaunich provided an overview and brief history of the fleet committee. Since that committee was formed eight years ago, more than 30 pieces of equipment were eliminated in the process. Mr. Jaunich spoke about light duty fleet and heavy duty fleet. There are currently 100 pieces of light duty equipment which are made up of cars, pickups, skid loaders, etc. Currently $225,000 of CIP funds are allocated annually for light duty fleet, funded by the general fund. The City currently has 22 pieces of heavy duty equipment which are made up of fire apparatuses, snow equipment, frontend loaders, etc. The light duty and heavy duty fleet program is currently not sustainable with the plan and has an annual shortage of roughly $384,000. Discussion was held regarding the possibility of using electric vehicles and potential cost savings. Mr. Jaunich then provided an update on the facility committee noting that the Facility Planning Concept/Funding Model has been working well and the Facility Manager concept has been working well. In 2016 and 2017 the aquatic center took up most of the City’s resources. In 2017 roof replacements from storm damage were done and the dehumidification units at the ice arena were upgraded. Staff has set aside up to $50,000 per year to address smaller facility items such as lighting upgrades, small roof projects, tuck pointing/joint repair, etc. 2018 projects include obtaining plans and specifications for a new roof at the Rec Center, an ADA sidewalk ramp in front of the City Center, completion of a schematic design of the new police station, LED light retrofit project at several locations and other miscellaneous small building repair projects. Mr. Jaunich then reviewed a draft project list for 2019-2023. Mr. Jaunich also reviewed the 5 Year CIP for both the compost and refuse funds which is just below $2.7 million. No major changes are planned in the compost fund at this point. Two higher dollar items remain in 2019 and 2020 with the screening plant and compost turner. Four walking trailers are included in the plan as well as a wheel loader in 2023. 2018 has been a good year in terms of sales revenue for the Compost fund. The Refuse Fund remains with a relatively low 5 Year CIP. The plan includes an upgrade to the very antiquated software for composting vessel controls, improve the tipping building’s HVAC system and replace the composting vessels starting in 2020. Potential changes with regard to the source-separated organic material curbside collection program, processing operations and produce end use will continue to be addressed. An office addition/expansion may be considered in future years but no price tag has been established. Public Works projects included in the 2019 plan are: Trunk Hwy 7/Montana Street crossing system and sidewalk; levee area walkway which is EDA/development driven; TDK/Uponor public roadway; South Central Area Trunk Storm Sewer Phase 2 which is east of the Rec Center; th South Grade Road and trail improvements (School Road to Trunk Hwy 15); 5 Avenue SW/SE reconstruction (Lynn Road to Ontario Street); pavement management program (Linden Avenue SW, Clinton Avenue SW, Merrill Street SW, Church Street SW and Harrington Street SW; wastewater treatment facility and collection system; water treatment facility and collection system; minor storm water system repairs; lakes/river basin improvement analysis; street lighting LED retrofit; and vehicle and equipment replacements. Mr. Jaunich then highlighted projects within the plan per year. Mr. Jaunich also reviewed project funding limitations/concerns which include a $1.9 million bonding target limitations, dedicated street sealcoating funding at $125,000/year, infrastructure maintenance needs at $250,000/year, construction cost increases, utility funds capacity, improvement special assessment limitations, municipal state aid & federal aid utilization and environmental and infrastructure grant possibilities. Mr. Jaunich also noted that long-term funding needs have to be identified for heavy and light fleet as well as playground system replacement. A funding plan for a new police station needs to be finalized. Infrastructure improvements need to be reviewed with 2019’s plan being dependent on approved grant dollars for the South Grade Road Trail Project and having a more accurate CIP being developed by December. An analysis on cash use versus financing needs to be looked at for the two large items planned in 2019 and 2020 at Creekside. Proper planning/forecasting on storm water, wastewater and water projects will be needed when evaluating the use of cash reserves to meet project needs. General Obligation storm water bonds along with storm water fees will cover the costs for the Linden Park storm water projects in 2019 and 2020 with a full analysis occurring in August/September. Mr. Jaunich explained that the LGA allocation is 46% to the general fund and 54% to the CIP. General discussion was held regarding residential development. Council Member Cook proposed an idea to move future development of the Dakota Trail along. Funding has been received to develop the trail to Lester Prairie and now the trails committee is looking to see how to develop the trail west to Hutchinson. The trail committee will most likely be making a recommendation to apply for a grant next year. An engineering study was completed by SRF on the surface of the trail which indicated that paving is the best option for the trail. Cook is wondering if the Council would be interested in a JPA with McLeod County on maintenance costs such as mowing, asphalt maintenance, signage, etc. Cook spoke about obligations related to a legacy grant. He asked if the Council would be comfortable discussing entering into a JPA with McLeod County with the City covering the asphalt payments and the County covering all other payments. Forcier noted he is not comfortable spending funds for projects outside of city limits. Cook noted perhaps this could be a discussion item when the City meets with County officials. Kent Exner spoke about a funding mechanism for street lighting projects – a street lighting utility fee. Exner noted perhaps the City should consider this and the funding of the proposed retrofits. 3. Adjournment Motion by Christensen, second by Lofdahl, to adjourn the workshop at 5:29 p.m. Motion carried unanimously. ATTEST: ________________________________ __________________________________ Gary T. Forcier Matthew Jaunich Mayor City Administrator