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HomeMy WebLinkAbout2008 07-14 500 CMW AGENDA MAPLEWOOD CITY COUNCIL COUNCIL MANAGER WORKSHOP 5:00 P.M. Monday, July 14, 2008 Council Chambers, City Hall A. CALL TO ORDER B. ROLL CALL C. APPROVAL OF AGENDA D. UNFINISHED BUSINESS 1. 2009-2013 Capital Improvement Plan - Discussion on Expenditure Plan. 2. Interviews for Environmental and Natural Resources Commission. a. Kevin Berglund b. Judith Johannessen E. NEW BUSINESS F. ADJOURNMENT Work Session Agenda Item D1 AGENDA REPORT TO : City Council FROM: Charles Ahl, Acting City Manager SUBJECT: Discussion: 2009 ? 2013 Capital Improvement Plan DATE: July 8, 2008 INTRODUCTION/SUMMARY th At the June 9 meeting, the City Council received the draft 2009 ? 2013 Capital Improvement Plan (CIP) as recommended by the City staff. The City Council tabled action on the CIP to allow discussion and review during a Work Session. th The following issues were raised by the City Council on June 9 for discussion: Level of Funding for Parks, Trails and Open Space Additional information on the reason and priority used for deferring projects The lack of improvements identified at Maplewood Community Center The impact of the proposed plan on the City?s current and future debt load Parks Funding Attached is a memorandum that addresses some concerns raised by the Park Commission. The th memo was reviewed with the Parks Commission on June 18. A joint meeting with the Park th Commission is planned for August 4 as part of the Council ? Manager Work Session. It is recommended that this issue be discussed as part of that Work Session. Deferred Projects The following 19 projects were requested by various staff but have been recommended for deferral as noted: 3 Hillcrest Projects ($4,200,000): the redevelopment of the Hillcrest area is recommended to be delayed until the final major phases of Gladstone redevelopment are completed. The redevelopment efforts put financial stresses on a number of city funds, as well; the City is not staffed to handle multiple redevelopment efforts. Commercial Property Redevelopment ($1,000,000): while this could be a good project, the emphasis for Maplewood and the top priority areas for redevelopment are Gladstone followed by Hillcrest. Putting money into this program would likely result in the reduction in funds to those redevelopment efforts. Fire Truck Replacement and Ambulance Replacement ($396,930): these replacements are funded by annual contributions to the Fire Truck Replacement Fund and Ambulance Fund. Those contributions have been lacking in the past two years, so adequate funds will not be available to replace these items until post 2013. MCC Basketball Floor ($121,534): with the new exercise area, this is not a priority. Public Works Carpeting ($61,000): recent improvements at Public Works make this a low priority. Adequate carpeting exists and replacement is not recommended. Police Department Expansion ($5,200,000): this could be a referendum item for voter consideration. At this point, no funding has been identified. Neighborhood Parks: ($550,000) [see attached] 2009 ? 2013 Capital Improvement Plan Page Two Lift Station Program: ($300,000) local upgrades will be considered to extend the life of the pumps and lift station equipment. 2 Signal Systems ($485,000): these signals are on the Ramsey County system. Until Ramsey County programs funds, these projects will need to be deferred. Equipment Replacement ($835,980): these six items have been deferred due to the lack of funding in the Fleet Management Fund. This fund is supported by charges to the various departments. Those have been capped at a 4% increase per year, so funding is lacking for the replacement of equipment and vehicles. MCC Improvements We are proposing $1,001,100 in capital improvement projects to the MCC from 2009 to 2013. We have prioritized these improvements through our Building Maintenance Engineer. The MCC fund has an annual allocation of tax supported subsidy. The goal is to maintain or decrease this subsidy each year at MCC. By programming approximately $200,000 each year toward capital projects, allows us to balance this funding need and the expenditure requirements. MCC staff and the Building Maintenance Engineer will be present to discuss these recommendations. The Council may wish to debate the issue of tax subsidy to MCC as it relates to replacement costs and expenditures. This is a levy impact issue. With Council direction, staff will proceed to prepare a detailed 5- to 10-year replacement plan over the next 4-6 months for inclusion in next year?s CIP. Current and Future Debt The outstanding debt for the City is $67,192,297 at the end of 2007 and is projected to be at $71,902,297 at the end of 2008, given the recent bonding approved by the City Council. The current plan and recommended deferrals are projected to keep our bonding level at approximately an equal level for the end of 2009 at $71,497,297. Obviously, it is easiest to project levy and debt impact for the following year. Given the current goals of maintaining a reasonable total levy increase (operating and debt combined), it is recommended that the new debt in 2009 continue to be limited. The continued investment in the City?s infrastructure and equipment is proposed to add a total of $64,600,000 of new debt for the five year planning period. That will extend the total outstanding debt by approximately $4,000,000 per year after 2009, raising the estimated net debt outstanding to $89,634,839. The planning for this debt will be managed to maintain our ratio of debt to market value at 1.8% as shown on pages 28-29 of the CIP. This is believed to be a critical investment ratio of funding for the City?s infrastructure and equipment in comparison to the overall market value of the City. The staff, in working with Springsted, our financial consultant, and based upon bond rating discussions with Moody?s rating service, recommends this 1.6 ? 1.8% ratio of bonded indebtedness to taxable market value as a good control measure. One item for discussion is a $2.0 - $4.0 million reduction in the annual street reconstruction program. That is currently the highest expenditure category in the CIP and contributes the most to the debt. Staff will be present to discuss this possible change. The percentage of the levy dedicated to debt is currently at 22%. Information on previous years and the trends on this will be presented as part of the discussion. Options are being reviewed for levy th reductions related to TIF that will be presented on July 14; and consideration should be given to transferring, and subsequently raising the Xcel Rate Utility Charge (called a tax at previous meetings) toward the debt. Xcel benefits extensively on our local road improvement projects. Their work and delays have cost the projects in excess of $75,000 - $100,000 annually. An annual transfer from this fund to the Debt Service Fund would seem appropriate to discuss and consider. RECOMMENDATION It is recommended that the City Council review with the staff the information included within this memorandum and provide additional information and questions that staff can address to allow the CIP to move forward to consideration of approval. Attachments: 1. Parks Memo 2. Parks Commission Handouts ß¹»²¼¿ ׬»³ Üï ߬¬¿½¸³»²¬ ï AGENDA REPORT TO: Park Commission FROM: Charles Ahl, Acting City Manager DuWayne Konekwo, Deputy Director of Public Works SUBJECT: Continued Discussion of 2009 ? 2013 Capital Improvement Plan DATE: June 12, 2008 INTRODUCTION At the June 9, 2008 City Council meeting, the Park Commission represented that they did not understand the changes in funding for the currently proposal Capital Improvement Plan. We would like for the Commission to have an understanding on the decisions and recommendations that has been used for the basis of the current plan. Following is a summary of the information used in the decision process. Background ? Financial Plan Let?s first examine 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 PAC Funding To date $ 481,536 Current Fund Balance $1,735,039 The Maplewood accounting process requires that funds be transferred out of the various funds into a project fund. These transfers have not occurred but are anticipated to occur in the next few months for projects that have been approved over the past 6 ? 12 months or will likely occur during the second half of 2008: Lions Park $ 25,000 Joy Park $ 200,000 Trail Improvements $ 100,000 Gladstone Savanna ? Phase I $ 900,000 Walter St and N. Beaver Lake Trails $ 100,000 Comprehensive Plan $ 20,000 Total 2008 Project Transfers $1,345,000 Effective Fund Balance $ 390,039 The plan anticipates that there will be additional PAC fees received during the remainer of 2008: Future 2008 PAC Revenue $ 156,381 Plan for 2008 End of Year Balance $ 546,420 ß¹»²¼¿ ׬»³ Üï ߬¬¿½¸³»²¬ ï Park Commission ? CIP Discussion Page Two * - Discussion: While it appears that we have a high fund balance currently [$1,735,039], the Commission and Council have committed funds to numerous initiatives. There are numerous unknowns regarding Gethsemane and Carver Crossing developments that may require additional funding from the PAC Development Fund, so it is not recommended that the fund be reduced or projects committed at this time. We are planning for an additional $150,000+ during the remainder of 2008, which may not be received. A conservative approach for financial planning has been suggested. * - Gladstone Discussion: The first phase of Gladstone will likely begin later in 2008. The first development has been delayed, so we do not know when we will receive the PAC fees from that development. Again, a conservative approach has been presented. It also should be reviewed on the status of the current Gladstone plan as it relates to Park Development Funding: It is true that at one point, it was 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 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 do not pay full PAC fees. The current plan for PAC revenue is: 665 new units @ $2,250 per unit = $1,496,250 The recommendation on revenue could be conservative; however, our recommendation is to not plan for improvements until funding is received. We have identified improvements of $1,500,000 that is shown within the plan. Background: 2009 Capital Improvement Plan Beginning of year Fund Balance in 2009: $546,420 New PAC Fees planned in 2009: $450,000 Between Gladstone ? Phase I and Carver Crossing, we are not aware of any major new developments or initiatives that will result in significant new PAC fees. We are concerned that this number is too high. Thus, we did not plan any major improvements for 2009. Planned Project for 2009: Open Space Improvements: $ 50,000 Planned End of 2009 Fund Balance: $956,640 * - Discussion The end of 2009 Fund Balance is predicted on over $600,000 of unknown revenue from development assumptions that are not eminent. We cannot recommend that we commit funds to projects until we know more about these revenues. We certainly have a $900,000 commitment to Gladstone that could be scaled back; however, we believe that investment in Gladstone is necessary in order to facilitate future development opportunities. In addition, the Gladstone Savanna has environmental contamination that needs to be coordinated with the overall grading. The PAC fund is not paying for the environmental work, but is coordinated to work together with that project. ß¹»²¼¿ ׬»³ Üï ߬¬¿½¸³»²¬ ï Park Commission ? CIP Discussion Page Three * - 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 proposes 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 will likely be very limited in 2009. 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 2009 ? 2013 period. Background: 2010 - 2013 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: Park Charges by Year: 2010 $ 400,000 2011 $ 400,000 2012 $ 450,000 2013 $ 500,000 TOTAL PAC Charges $1,750,000 Projects Planned by Year: 2010 $ 350,000 2011 $ 900,000 2012 $ 400,000 2013 $ 200,000 TOTAL PROJECTS $1,850,000 Projected Fund balance at end of 2013 $ 915,140 * - Discussion We fully understand that the Parks Commission has a full list of needs. At this point, we cannot recommend that you program those projects until there is a new funding source. In our analysis, we believed that the neighborhood parks commitment that was originally planned as undesignated at $350,000 has been prioritized by the Parks Commission to Joy Park. ß¹»²¼¿ ׬»³ Üï ߬¬¿½¸³»²¬ ï Park Commission ? CIP Discussion Page Four RECOMMENDATION It is recommended that the Park Commission continue the discussion of the items listed above. We fully understand that previous plans have programmed as much as $4,000,000+ in park improvements. Given the current development scenarios and economic times, we do not see that this type of plan can be supported. We understand that the Commission has recommended to the City Council that we program back into the CIP the amount of $50,000 per year beginning in 2010 for neighborhood parks. As staff, we are okay with that recommendation if the Commission understands the parameters that this is for new park improvements, when we are having difficulty funding the replacement of the current park amenities. Those amenities cannot be funded with PAC dollars for replacement. The Commission should discuss whether we can afford to continue the expansion of our park system. Attachment: 1. CIP ? Park Development Fund (403) Statement of Revenues 2. Packet of information presented to City Council on June 3, 2008 In the past I was impressed by the way that Maplewood staff listened to Lny concerns and then helped me find wa s to deal with them. I would like to work with the Commission and the staff to develop creative options and solutions.