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Home My WebLink About2009 07-13 City Council Manager Workshop PacketAGENDA MAPLEWOOD CITY COUNCIL MANAGER WORKSHOP 5:30 P.M. Monday, July 13, 2009 Council Chambers, City Hall A. CALL TO ORDER B. ROLL CALL C. APPROVAL OF AGENDA D. UNFINISHED BUSINESS E. NEW BUSINESS 1. Presentation of 2010 -2014 Capital Improvement Plan F. ADJOURNMENT THIS PAGE IS INTENTIONALLY LEFT BLAND AGENDA REPORT TO: James Antonen, City Manager FROM: Charles Ahl, Assistant City Manager Robert Mittet, Finance Director SUBJECT: 2010 — 2014 Capital Improvement Plan DATE: July 7, 2009 Work Session Item E 1 INTRODUCTION Attached is the proposed 2010 — 2014 Capital Improvement Plan for review at this work session. Members of the Park Commission, the Planning Commission and the Environment and Natural Resources Commission are preparing their recommendations. A representative of those Commissions has been invited to make a recommendation to the City Council at the July 27 Regular Meeting. This will be a review for the Council to review the document before consideration of adoption on July 27 Summary Following is a summary of previous plans. Note that in 2008, the City Council removed $11,000,000 from projects from the plan and established a goal to stabilize the growth in the CIP. The 2010 -2014 CIP is a continuation of that plan with the exception that a $12.0 million project was added in 2014 at TH 36 — English that increase the plan accordingly and provides for a major jump in the amount. COMPARISON TO PREVIOUS PLANS PLANNING YEAR TOTAL $$ AMOUNT CHANGE 2005 — 2009 CIP: $58,665,870 ---- - - - - -- 2006 — 2010 CIP: $64,889,670 +10.6% 2007 — 2011 CIP: No CIP Completed N/A 2008 — 2012 CIP: $76,351,734 +17.7% 2009 — 2013 CIP: $76,749,098 (proposed) +0.5% 2009 — 2013 CIP: $65,759,098 (approved) - 13.9% 2010 — 2014 CIP: $76,363,760 (proposed) +16.1% The following are the major expenditures in the CIP: • 2014: $12,000,000 — TH 36 — English Interchange • 2013: $5,750,000 — Gladstone, Phase III • 2010: $5,750,000 — Hills and Dales Area Streets • 2011: $5,420,000 — Western Hills /Larpenteur Area Streets • 2012: $4,430,000 — Crestview / Highwood Area Streets Packet Page Number 3 of 8 2010 — 2014 CIP PAGE TWO To accommodate a reduction in the plan, the following major projects (pages 152 -153) needed to be deferred from the next five year plan to meet the overall goal of stabilizing the plan: PROJECTS DEFERRED • Hillcrest Area Redevelopment: $4,200,000 • Commercial Property Redevelopment: $ 800,000 • Equipment Replacements: $ 578,672 • Police Department Expansion: $5,200,000 • MCC Building and City Hall Upgrades: $ 516,000 • Public Works Improvement Projects $9,765,000 • Total of All Deferred Projects: $21,409,672 Note: the amount of deferred projects has increased by $8,000,000 from the 2009- 2013 CIP. The following chart indicates the proposed financial plan and impact on debt: 2008: $15,546,450 $ 3,421,925 City's total tax levy Debt load within tax levy (22 %) 2008: $75,352,297 2009: ($13,067,048) 2009: $74,057,297 2010: $78,997,297 2011: $77,367,297 2012: $76,247,297 2013 $75,719,839 2014: $75,510,167 Total Debt Debt Payments Due Projected Debt (- 0.54 %) Anticipated Debt +(6.67 %) Anticipated Debt — (2.06 %) Anticipated Debt — (1.45 %) Anticipated Debt — (0.69 %) Anticipated Debt — (0.28 %) Packet Page Number 4 of 8 2010 — 2014 CIP PAGE THREE The following is a summary of the debt analysis section of the proposed CIP and demonstrates the impact of the debt, which is generally limited to maintaining the debt levy at the current level. If no new debt is issued, the City's debt would decrease to $35,785,167 in the next five years. A recent audit of the City's debt found that 75% of all debt is scheduled to repaid within the next nine years, which ranks the City in the top 20% nationally for debt management. Debt in 2004: $59,882,297 Debt in 2008: $74,462,297 - growth of 5.5% per year Proposed Debt in 2009: $74,057,297 - no growth Future years Debt growth is expected at 3 -5% w/o refunding Debt per capita • 2004 —2006: just under $1,600 per person • 2007: increased to $1,820 per person • 2008: increased to $1,950 per person • 2009: decrease to $1,911 per person • 2013: projected to increase to $1,980 per person A measure of a City's fiscal management is debt capacity. Following are the critical items within that analysis: o Legal Debt Margin is 3% of market value = $117,595,380. o Applicable Debt is $2,010,000. o City's goal for fiscal management has kept debt at 2.0% of Market Value. 2010: 2.0% 2011: 1.9% 2012: 1.9% 2013: 1.8% 2014: 1.7% Packet Page Number 5 of 8 @mem PARKS CIP ISSUES The following is a reprint of the information that was provided to the Park and Recreation Commission: Background — Financial Plan The balance of funds available in the Park Development Fund over the past few years: 2005 End of Year Balance $ 592,878 2006 End of Year Balance $ 884,950 2007 End of Year Balance $1,236,752 2008 End of Year Balance $1,657,039 The Maplewood accounting process requires that funds be transferred out of the various funds into a project fund. The transfers for 2009 are: Lions Park $ 50,000 Joy Park $ 200,000 Lake Links Trail $ 115,000 Gladstone Savanna — Phase 1 $ 40,000* Open Space Improvements $ 50,000 Neighborhood Parks $ 50,000 Comprehensive Plan 10,000 Total 2008 Project Transfers $ 515,000 Effective Fund Balance $1,142,039 The plan anticipates that there will be additional PAC fees received during the remainder of 2009 Future 2009 PAC Revenue $ 100,000 Plan for 2009 End of Year Balance $1,242,039 * - Gladstone Discussion: It is anticipated that the first phase of Gladstone may begin later in 2009. The first development has been delayed, so we do not know when we will receive the PAC fees from that development. A review of the Gladstone plan: • It was originally assumed that the City would receive $2,400,000 of PAC fees from the development. However, that was based on the following: 800 new units @ $3,000 per unit = $2,400,000 Packet Page Number 6 of 8 2010 — 2014 CIP PAGE FIVE • The development plan has been revised to a new range of 650 — 690 new units. In addition, there was discussion that some of these units will be reduced space, such as senior housing that does not pay full PAC fees. The current plan for PAC revenue is: 665 new units @ $2,250 per unit = $1,496,250 • We have proposed to begin consideration of Savanna improvements during the second half of 2009, with major improvements in 2010. This would be supplemented with a proposed agreement with the developer of Phase I whereby the Developer would make a $500,000 contribution to the Savanna improvements as part of the Development Agreement. • Future phases of the development are proposed in 2012 with Phase II and 2014 in Phase III that correspond to a similar level of PAC Fees from the developments. The overall plan is that all PAC fees collected in Gladstone's redevelopment would be dedicated to improvements within Gladstone with a focus on attempting to supplement these funds with other sources of monies through the development process. • We have identified improvements of $1,800,000 that is shown within the plan, which is an increase of $300,000 from last year's plan, but a decrease in the PAC contribution. Discussion There is currently no general tax dollars dedicated for a transfer into the Park Development Fund. The 2006 — 2010 CIP identified the possibility that general fund levy money would be transferred into the fund beginning in 2007. This did not occur. The CIP is a planning document, not an official budgeting allocation. In April 2005, when the 2006 — 2010 CIP was prepared, it was assumed that taxes may become available beginning in 2007 in the amount of $393,330, and increase by $300,000 in 2008 and another $300,000 in 2009, so that the 2009 allocation was $939,080. The 2007 and 2008 approved City budget did not include any allocations, and it is highly unlikely that $939,080 will be available for 2009. A CIP for the years 2007 — 2011 was not adopted by the Council. There was no tax dollars dedicated to the Park Development Fund in the 2008 — 2012 CIP. It should be noted that the 2009 — 2013 CIP proposed to start a small levy dedication for park replacements of $60,000. We recognize that there is an annual need of $200,000 - $300,000 for park equipment replacements and community field upgrades; however, these improvements cannot be funded from the Park Development Fund and PAC fees due to the legal requirements for use of PAC fees. The only other current source of funds is property taxes, which are very limited in 2009 - 2010. It will not be easy to begin this dedication of tax dollars; however, we are recommending that $265,000 of general levy dollars be dedicated to this purpose during the 2010 — 2014 period. Background: 2010 - 2014 Capital Improvement Plan The assumptions for future years include some less conservative assumptions on PAC fees but also a conservative approach on Fund Balance. The intent is to be planning for projects that may occur in future years, while also maintaining an appropriate fund balance. Following are the assumptions: Packet Page Number 7 of 8 2010 — 2014 CIP PAGE SIX Park Charges by Year: • 2010 • 2011 • 2012 • 2013 • 2014 • TOTAL PAC Charges $ 600,000 ($400K PAC from Gladstone) $ 635,000 ($335K PAC from Gethsemane) $ 900,000 ($600K PAC from Gladstone II) $ 250,000 $ 650,000 $3,035,000 Projects Planned by Year: • 2010 • 2011 • 2012 • 2013 • 2014 • TOTAL PROJECTS Projected Fund balance at end of 2014 $ 155,000* It is recommended that the City Council receive the draft 2010- 2014 and provide staff with any directions for revisions before consideration of adoption on July 27, 2009. Attachment: 1. 2010 - 2014 CIP [separate document] Packet Page Number 8 of 8