HomeMy WebLinkAboutCity Council Packet 01-16-2007 SpecialAgenda
City of Plymouth
Special City Council Meeting
Tuesday, January 16, 2007
6:00 p.m.
Medicine Lake Room
1. Call to Order
2. Discuss 2007-2011 Capital Improvements Program
3. Adjourn
Agenda Number:
CITY OF PLYMOUTH
CITY COUNCIL AGENDA;REPORT
TO: Laurie Ah ens, Cly Manager
FROM: Mike Kohn, Financial Analyst through Jean McGann, Administrative
Services Director
SUBJECT: Draft 2007-2011 CIP
DATE: January 9, 2007 for Council Study Session on January 1.6, 2007
1. ACTION REQUESTED: Consider draft 2007-201.1 CIP and provide staff with direction on
the 2007-2011 CIP.
2. BACKGROUND: As has.been the past practice, the 2007-2011 CIP is being provided to the
City Council for their input prior to going to the Planning Commission for public hearing. If
there are no major changes, the CIP can come to the Council for formal adoption on February
13, 2007. The tentative calendar of events is as follows:
January
16th City Council Study Session
January 17th Legal Notice Due
January
25th Final CIP Draft Available For Public Inspection
February
7th Planning Commission — Public Hearing
February
13th Council Adoption of CIP
The 2007-2011 CIP has a somewhat different look and feel from previous versions. It is now
being prepared with Plan -It capital improvement software that handles the project detail
sheets and summary information. The CIP also differs in the fact that major facility
replacement items, information technology items, and equipment/vehicle items have now
been added. The inclusion of these items will better enable the City to plan in these areas
which have a significant impact both operationally and financially.
3. DISCUSSION: Development of the 2007-2011 CIP has been more difficult than those
prepared over the last few years. This is due predominantly to an increase in "needs" without
a corresponding increase in revenues. For the most part, this is attributable to the fact that
Plymouth, like many other cities, has lived through the years when infrastructure was new
and funding for replacement was not necessary. As a result, Plymouth has enjoyed property
tax and utility rates that are among the lowest in the state. Now, however; streets, watermain,
water treatment plants, sewermain, and liftstations that were installed in the 1960's, 1970's,
and 1980's are in need of repair or replacement.
Another factor contributing to the increase in "needs" is growth. Streets and facilities that
were adequate to serve Plymouth at half its current population are no longer adequate. Stop
signs are being replaced by traffic signals, parks need to be purchased before land is no
longer available, water quality needs to be preserved before development takes its toll. All of
these items lead to an increase in "needs".
What this all means is that there are more projects than dollars. This leads to the need to
make difficult decisions regarding prioritization, rate/fee and or tax increases, and alternate
means of deferring rate/fee or tax increases (bonding). In preparing the draft 2007-2011 CIP,
staff attempted to work through these difficult decisions to get a program that will work and
is in the best interests of the City as a whole. At this point, staff needs Council's input
regarding their assumptions. to produce a CIP that can be forwarded for public hearing and
final adoption.
The following is a summary of each category of the CIP and any major issues or highlights:
Building/Facility Projects
Expenditures for Building/Facility projects are as follows:
2007 2008 2009 2010 2011 TOTAL
277,000 $56,000 $436,000 215,000 795,000. 1,779,000
Major items of note include (totals in thousands):
2007 2008 2009 2010 2011
Roof Replacement - Fire Station 3 105
Recarpet - Council Chambers 35
Recarpet/Repaint - City Hall 300
Roof Replacement - Public Works 750
All funding for Building/Facility projects is from the Facilities Management Fund. Despite
some of the large projects, the Facilities Management Fund will increase cash reserves over
the next five-year period from approximately $2,600,000 to $2,900,000.
Issues:
Facilities Management is in the process of beginning a comprehensive needs
analysis. This will include a detailed inventory of all structures to identify and
prioritize needs.
Once the needs have been determined, an evaluation of funding sources will be
undertaken. Currently, Facilities Management pays for replacement of major
building components such as boilers, HVAC equipment, carpet, roofs,
furnishings, etc. However, at some point a determination needs to be made as to
how the City plans on financing building replacements and expansions. Should
they be from new funds or accumulation of reserves?
Information Technology
Expenditures for Information Technology initiatives are as follows:
2007 2008 2009 2010 2011
1,342,200 $1,235,000 $815,000 $605,000 $215,000
Major items of note include (totals in thousands):
Telephone System Replacement
Web Streaming of Council Meetings
Complaint Tracking Software *
Replace — Finance/Payroll/HR Software
Records Management System
Fiber Connection to Outside
Replace Police MDC's
Replace Land Management Software
Replace Network Infrastructure
TOTAL
4,212,000
2007 2008 2009 2010 2011
300
18.2
24
1,000 $1,000
205
200
115 $105
500 $500
120
All funding for Information Technology initiatives comes from the Information Technology
Fund.
Included in CIP and adopted budget. Items will need separate Council action to proceed.
Issues:
Information Technology is in the midst of a restructuring which may result in changes
to the recently adopted budget and the proposed CIP. Staff may be bringing an
amended budget proposal to Council at a later date.
The current financial/payroll system has been identified as a significant. risk going
forward due to reliability and support issues. It also appears that new software
integrating financials, payroll, human resources and budget would offer significant
functional and operational advantages. Staff is in the beginning stages of selecting
new software, with implementation beginning in the later part of 2007.
Other software also needs to be evaluated. Packages such as land management,
permits, utility billing, special assessments, and police records may also need to be
replaced if increased functionality and productivity can be demonstrated. These items
will be evaluated for future CIP's.
Any changes in software will likely have hardware/infrastructure implications. This
may result in increased costs for hardware/infrastructure replacement.
Funding appears sufficient to cover items contained in the proposed CIP with some
safety factor. The model shows cash balance staying above $2,000,000.
Park Proiects
Expenditures for Park projects are as follows:
2007 2008 2009 2010 2011 TOTAL
6,235,000 $5,635,000 $5,015,000 $660,000 $420,000 $17,965,000
The $17,965,000 of funding is from the following sources:
Bonds 9,000,000
Capital Improvement Fund 475,000
Community Improvement Fund 2,250,000
Donations 200,000
Insurance 40,000
Park Dedication 3,475,000
Park Replacement Fund 1,705,000
State/County/Federal 820,000
Major items of note include (totals in thousands):
227,500
2007 2008 2009 2010
Land Acquisition $5,000 $4,000 $3,750 $250
Greenwood Park Building $230
Federal Funding
Seven Greens Neighborhood Park $300
Hennepin County
Trail Crossing - 494 or Vicksburg. 1,000
Taryn Hills Neighborhood Park 150
Trail Crossing — Cheshire Lane 250
East Side Skate Park 350
Repair/Replace Zachary Tennis Courts 140
Issues:
2011
All funding sources for the park projects appear adequate given current expenditures
and revenue estimates for Park Dedication fees. If park dedication fees fail to reach
projections some projects may have to be deferred. This.is monitored on an annual
basis.
The single biggest park initiative is the acquisition of land for the NW Greenway and
10th Playfield. Expenditure of funds and timing of bonding depends on the
willingness of sellers. The City must decide how aggressive it wants to be in
pursuing acquisition of land.
Street Proiects
Expenditures for Street Projects are as follows:
2007 2008 2009 2010 2011 TOTAL
16,504,000 $19,583,000 $18,576,000 $7,730,000 $19,375,000 $81,768,000
The $81,768,000 of funding is from the following sources:
Capital Improvement Fund 227,500
Developer Construction 2,070,000
Donations 40,000
Federal Funding 17,932,500
Hennepin County 7,285,000
Municipal State Aid 11,599,000
Sewer Fund 427,000
Special Assessments 14,795,000
State Bridge Funds 156,000
Street Replacement 20;598,000
Water Fund 6,088,000
Water Resources 550,000
Major items of note include (totals in thousands):
Fernbrook Lane Reconstruction
Intersection Improvements - CR47 & CR 61
Temporary Traffic Signal — Vicksburg & CR47
Street Reconstruction Program
Mill & Overlay — Vicskburg (32nd to Old Rock)
CR 101 Reconstruction
CR 24 Reconstruction
Street Reconstruction — 36th Ave
2007 2008 2009 2010 2011
5,884
930
200
8,145 $6,935 $5,180 $6,220 $6,330
560
7,700 $5,500
3,000
460
Construction Cheshire Lane — Glacier Vista/CR 47 $1,000
Street Reconstruction South Shore Drive (including bridge) $1,381
Vicksburg Lane Reconstruction — Old Rock/Schmidt Lake $3,800
Vicksburg Lane Reconstruction, widening, and bridge $10,000
Campus Drive Street Reconstruction $1,620
Issues:
MSA Fund expenditures exceed revenues for the five-year period resulting in a
negative fund balance and interest charges for internal borrowing.
Street Reconstruction expenditures greatly exceed property tax revenues for future
years. This will necessitate bonding, or deferring projects, and increased property
taxes. (Background materials are attached.)
The temporary traffic signal at Vicksburg and CR47 has been held up by the County.
Background materials are attached.)
Street reconstruction projects will require watermain replacement in 2007, 2008, and
every other year thereafter. This will cost $6,088,000 and will impact the Water Fund
and water rates.
The assessment rate for special assessments is currently pegged to the prime rate.
This results in rates of 8.25% for 5 -years, 8.75% for 10 -years and 9.25% for 15 -years.
These rates have been deemed by some to be excessive.
The Water Resources Fund is asked to pay for installation of rain gardens on street
reconstruction projects for a total of $550,000.
Transit Proiects
Expenditures for Transit items are as follows:
2007 2008 2009 2010 2011 TOTAL
177,000 $436,000 $3,700,000 $17,200,000 $5,200,000 $26,713,000
The $26,713,000 of funding is from the following sources:
Federal Transit Funding $5,000,000
National Transit Data Base $800,000
Regional Transit Capital Bonds $20,913,000
Major items of note include (totals in thousands):
2007 2008 2009 2010 2011
Purchase Of Buses $177 $236 $3,500
Construction - 169 Transit Facility $2,000 $5,000
Construction - NW Transit Bus Garage $15,000
All Transit projects are funded by outside sources. No capital items contained in the 2007-
2011 CIP are anticipated to be paid from Transit Fund reserves.
Issues:
The City must decide whether it wishes to pursue the transit facility and bus garage
proj ects.
Vehicles/Equipment
Expenditures for vehicles/equipment are as follows:
2007 2008 2009 2010 2011 TOTAL
1,541,600 $1,095,400 $1,054,100 $1,508,800 $1,849,300 $7,049,200
All vehicle/equipment items are funded by the Central Equipment Fund.
Major items of note include (totals in thousands):
2007 2008 2009 2010 2011
Refurbishment of Ladder 31 $475
Replacement of Pumper/Engine $284 $296
Replacement of Aerial Telesquint $342
Issues:
While the Central Equipment Fund remains solvent for the next five-year period, it
does show a significant decline from $4,000,000 to about $2,600,000. This fund
needs to be modeled on a longer term basis to determine rate sufficiency.
Water Quality & DrainalZe
Expenditures for Water Quality & Drainage are as follows:
2007 2008 2009 2010 2011 TOTAL
1,495,000 $1,615,000 $1,021,300 $465,000 $768,100 $5,365,000
The $5,365,000 of funding is from the following sources:
Bassett Creek Watershed $1,050,000
Minnehaha Creek Watershed $125,000
State/County/Federal $198,000
Water Resources.Fund $3,992,000
Major items of note include (totals in thousands):
Erosion Repair - Wood Creek
Erosion Repair - Conor Meadows
Erosion Repair - CR 61 & CR 9
Highway 55 Drainage Improvements
Mooney Lake Permanent Outlet
Plymouth Creek Water Quality Pond
Wild Wings Development Wetland
Timber Creek Structure & Pipe
Plymouth Creek Stream Bank Repairs
Ranchview/Medina Road Wetland
Bass Lake Outlet
Unspecified Drainage Improvements
Storm System Sewer Repairs
2007 2008 2009 2010 2011
390
200 $250
350
175
250
925 36.3 $25.6 $13.1
75 $175
100
50 250
125
35 200
200 250 $250 $250
75 100 $100 $100
Issues:
Revenues assume the rate increases outlined by the Surface Water Task Force of 7.71%
in 2007, 7.62% in 2008, and 7.3% in 2009. Thereafter, rates were modeled at 5% per
year.
If projects are done as projected in the CIP, the cash balance of the Water Resources Fund
will decline to about $320,000 in 2009. This is below the benchmark level recommended
by staff. (Background materials are attached.)
The Plymouth Creek pond project would require an internal borrowing of $1,000,000.
This is necessary because Bassett Creek will reimburse for the project over a four-year
period.
Some.proposed projects have been deferred or scaled back to fit the projected stream of
revenues. (Background materials are attached for Wood Creek, Conor Meadows, and
CR61/CR9)
The CIP and the Water Resources Fund model do not include provisions for items
required to meet future mandates including TMDL's.
The proposed CIP reflects $250,000 in additional project costs when compared to the
2007 adopted budget. This is due to including the Wild Wings development at a cost of
75,000, the Mooney Lake Outlet cost increasing from $125,000 to $250,000, and
funding for water quality components of the street reconstruction area increasing by
50,000. If Council chooses to do these projects, without any corresponding decreases to
other items, expenditures will exceed the adopted 2007 budget.
550,000 of Water Resources Fund monies are allocated to raingardens for street
projects.
Water and Sewer
Expenditures for Water and Sewer are as follows:
2007 2008 2009 2010
2,900,000 $1,793,000 $2,389,000 $638,900
The $9,143,690 of funding is from the following sources:
Sewer Fund
Utility Trunk Fund
Water Fund
4,253,690
3,620,000
1,270,000
2011 TOTAL
1,422,790 $9,143,690
Major items of note include (totals in thousands):
2007 2008 2009 2010 2011
Lining Sanitary Sewer Main $330 $363 $399 $439 483
Watermain — Vicksburg (CR47/Schmidt Lake) $750
Well Number 16 $1,550
Well Refurbishing $220 $200 $200 $200 $200
Sewer & Liftstation - Vicksburg and
54th $410
Refurbish & Upgrade 281h Ave Liftstation $600
Refurbish & Upgrade Pike Lake Liftstation $1,000
Refurbish & Upgrade. Imperial Hills Liftstation $740
Issues:
6,088,000 of watermain replacement is incorporated in street reconstruction projects.
This is the first time that the City proposes large scale replacement of watermain as
part of street reconstruction projects. Water rates are not currently sufficient to cover
this increase in activity. It will take about a 25% water rate increase in 2007, to bring
rates to a level adequate to finance proposed watermain replacement projects with
future 5% annual rate increases. (Background materials are attached.)
In order to lessen the impact of a 25% water rate increase, sewer rates could be frozen
for a year. This would raise the annual future rate increase level from 4.5% to 6% for
several years. (Background materials are attached.)
In total, the effect of a 25% water rate increase, 0% sewer rate increase, 7.71% water
resources rate increase, and 0% recycling rate increase would be 8.3% or about $2.90
per month. (Background materials are attached.)
The Greentree Liftstation just failed. Staff is getting quotes on what it will cost to get
it fixed. It may be more cost-effective to replace the liftstation rather than make
repairs. This would require a change in the CIP, and deferral of other items to live
within the adopted 2007 budget.
Utility rates need to be adopted for 2007 as soon as the City Council is comfortable
with the proposals.
The Comprehensive Plan process will likely have a great impact on future CIP's for
water and sewer projects.
In summary, the 2007-2011 CIP includes projects totaling $153,995,000. This compares to
104,427,500 for the current CIP. Major areas of expansion are Parks, Transit and Streets.
Also contributing to the increase is the inclusion of Facilities, Information Technology and
Vehicles/Equipment. The above totals do not include the additional listing of other potential
projects that are either outside the five-year time frame or have no solid funding source.