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10. Border 2 Border Grant Funding Request Staff Report Date of Meeting: May 1, 2024 For: Honorable Mayor and Council From: Kyle Morell, City Administrator Subject: Midco Border 2 Border Grant Funding Request Background: At the April 18 Internet Action Committee meeting, Midco announced they are applying for a Border 2 Border grant for 154 passings within Scandia, most of which are east of Hwy 95 along the St. Croix River. A map and project summary are attached. The cost of the Scandia project is estimated to be $1,337,459. Midco will contribute $385,000 and is asking the City for a $300,000 contribution. If awarded, construction for the project would have to be completed by the end of 2026. The IAC posted news of the grant application on social media last Friday. Since then, I have received 23 letters of support, most from residents within the grant area and a couple from residents just outside the grant area who are asking to be included. I am working with Midco to refine the address list of affected parcels, as some parcels are not on their address list but are surrounded by parcels that are part of the grant. Financial Impact: The requested city funds will not be due until after construction is complete and speed tests are done to verify that grant requirements regarding delivered upload and download speed have been met. This is usually the case with Border 2 Border Grants. In the past, the City funds were sent to Midco during the calendar year after construction was completed. The attached 401 CIP Fund spreadsheet shows the funds available in 2026, but they will more than likely be paid in 2027. Options: 1) Approve Border 2 Border Grant Participation and Funding Request 2) Deny participation in the Border 2 Border Grant Program Recommendation: Option 1 Attachments: Scandia – Round 10 Border 2 Border Grant Map Scandia – Round 10 Border 2 Border Grant Project 401 CIP Fund Letters of Support Scandia Area Legend Prop osed Project Area ± 0 1 2 Miles Minnesota Border to Border Broadband Grant Project Midco is applying for a Border-to-Border broadband grant for portions of Scandia. This is a continuation of the extensive expansion Midco has been conducting in the area in the last four years. Scandia Project Details: • Total Project Cost: $1,337,459 • Midco Contribution: $385,000 • Proposed Scandia contribution: $300,000 • Scandia project passings: 154 Midco is requesting a local contribution and support from Scandia. This contribution would be contingent upon Midco being awarded the grant from the DEED Office of Broadband Development. DEED prioritizes broadband projects that have strong local supporting, and a financial contribution is a key measure of that support. Thank you for your consideration. Inflation Assumptions 1 Revenue (Non-property tax) 0.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2 Interest Earnings 0.00% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3 Expenses 0.00% 4 CIP Inflation Factor 0.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 2022 2023 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 ACTUAL ACTUAL Projected REVENUE 5 Property taxes 217,336 293,791 235,000 120,000 130,000 135,200 140,608 146,232 152,082 158,165 164,491 6 Intergovernmental - - - - - - - - 7 Capital Improvement Debt Levy - - - - - - - - 8 Special assessments - - - - - - - - - - - 9 Investment Income 3,126 2,300 1,500 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 10 Refunds and Reimbursements 11 Park Dedication Fees 12 Rental and lease income - - - - - - - - - - - 13 Miscellaneous Revenue - - - - - - - - - - 14 Total Revenue 220,462 296,091 236,500 121,000 131,000 136,200 141,608 147,232 153,082 159,165 165,491 EXPENSES 15 Total Current - - - - - - - - - - - 16 Payables internet - - - - - - - - - - - 17 Debt service - - - - - - - - - - - 18 Total Capital Projects 296,733 198,059 190,073 235,001 645,072 135,000 108,000 112,072 208,135 169,859 618,083 19 Total Expenses 296,733 198,059 190,073 235,001 645,072 135,000 108,000 112,072 208,135 169,859 618,083 20 Revenue Over / (Under) Expenses (76,271) 98,032 46,427 (114,001) (514,072) 1,200 33,608 35,160 (55,053) (10,695) (452,592) OTHER FINANCING SOURCES / (USES) 21 Bond Proceeds 22 Transfers In - 8,000 - - - - - - - - - 23 Transfers Out to Sewer Fund (2,640) 24 Transfers Out- (200,000) 25 Total Other Sources / (Uses) - 5,360 (200,000) - - - - - - - - 26 accounts payable 27 Prior Period Adjustments 28 Ending Fund Balance 564,735 782,892 629,319 515,318 1,246 2,446 36,054 71,215 16,162 5,467 (281,634) CITY OF SCANDIA CITY OF SCANDIA Capital Improvement Plan Capital Improvement Plan Capital Improvement Fund 401 Capital Improvement Fund 401 CA S H F L O W A N A L Y S I S 2022 2023 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 Capital Project Name Year ACTUAL ACTUAL PROJECTED 29 12,000 30 Broadband Development Grants to MIDCO 2022 236,700 31 Development Code Update 2022 5,771 32 Community Center Improvements-Doors & security 2022 16,609 33 Council Chambers remodel 2022 5,103 7,476 34 Gateway Trail 2025 15,000 160,000 35 Broadband Development Grants to MIDCO 2023 12,750 119,500 92,000 300,000 108,000 36 County Ped & Bicycle Accomodations 2023 50,000 37 Wall Panel Joint Replacement Fire Hall-leaking 2023 16,250 38 Council Chambers remodel 2023 12,309 39 Security Improvements CCTV for Park 2024 14,000 40 Bliss Additions Stormwater plan 2023 122,525 135,000 41 new Exhaust removal system for truck bays 2024 58,399 42 new Warning Sirens 2025 31,633 43 Arts & Heritage Center Amphitheater 2027 0 44 Arts & Heritage Center Sidewalk and Walkways 2027 45 CC AC Condenser Replacement 2025 37,960 46 Lobbying 2025 47 Fire/PW Potable Well Pump (2000) Replacement 2026 11,699 48 2010 Fire Radios Replace 3 unspupported radios 2030 17,548 24,016 49 2010 Homatro Cutter Twin Line R-1(Jaws of Life)2030 40,945 56,036 50 2015 Lucas CPR Device-replacement 2030 17,548 24,016 51 Cold Storage Building 2030 112,072 52 Additional Comm Cent Elec Locks 2030 17,548 24,016 53 Large Hall and Heritage Room Carpeting 2030 80,052 54 2000 Station Bay floor epoxy coating-maintenance 2031 21,900 31,171 55 2010 Washer/Extractor-replacement 2031 9,125 12,988 56 2012 UTV & Trailer replacement-off road rescue 2031 42,583 60,609 57 2017 Thermal Imaging Cameras (1of3) find hot spots 2031 9,733 13,853 58 Zoll Monitor/Defib 2031 51,239 59 Second Fire Station 2032 337,136 60 Community Center Design & Planning 2032 280,947 61 Air Containment Unit 2033 62 Community Center Improvements-Front Office + Equip Room 50,000 63 CIP placeholder - SERVER REPLACEMENT 2035 7,800 Total Capital Projects 296,733 7,476 198,059 190,073 235,001 645,072 135,000 108,000 112,072 208,135 169,859 618,083 PROJECTED NEW DEBT TERMS Updated KHM As of Date:6/27/2023 1 Par Amount (Line 14) - - - - - - - - - - - 2 Number of Years 15 15 15 15 15 15 15 15 15 15 15 3 Interest Rate 0 0 0 0 0 0 0 0 0 0 0 4 New Debt Levy - - - - - - - - - - - Ca p i t a l P r o j e c t O u t l a y Ca p i t a l P r o j e c t O u t l a y Project