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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.