5. 2020-2024 Capital Improvment Plan as recommended by CIP committee after 08 09 meeting
City of Scandia
Capital Improvement Program
2020 – 2024
Recommendations from Capital Improvement Committee
August 7, 2019
Committee Members:
Terry Gorham, Adam Hawkinson, Public Works Director
Perry Rynders Mike Hinz, Fire Chief
Dominic Mitchell
Mark Lofstrom
Steve Kronmiller, City Council
CONTENTS
Introduction
What is a CIP? .................................................................................................................. 1
Scope of the Draft CIP ..................................................................................................... 1
Funding Sources .............................................................................................................. 2
Project Priorities .............................................................................................................. 3
2020-2024 CIP Overview……………………………………………………………………………………4
2020-2024 CIP by Fund
Capital Improvement Fund ............................................................................................. 5
Equipment Replacement Fund ........................................................................................ 6
Park Improvement Fund ................................................................................................. 7
Local Road Improvement Fund…………………………………………………………………………………..8-9
201 Sewer Fund………………………………………………………………………………………………………….10-11
Uptown Sewer Fund…………………………………………………………………………………………………..12
CIP Summary Data
Project Listing by Department (All Years) ....................................................................... 6
Projects by Year, 2020 thru 2024 .................................................................................... 8
Sources and Departments Summary, 2020 thru 2024.................................................... 10
Projects by Year, 2021 thru 2025 .................................................................................... 11
Sources and Departments Summary, 2021 thru 2025.................................................... 12
Projects by Department, 2020 thru 2025 ....................................................................... 13
Projects by Source, 2020 thru 2025 ................................................................................ 15
Equipment Replacement Fund, Replacements by Department ..................................... 18
Equipment Replacement Fund Cash Flow, 2020-2025 ................................................... 19
Appendix
Project Details, All Projects ............................................................................................. 20
INTRODUCTION
The Capital Improvement Program (CIP) for the five-year period of 2020 through 2024 is the ninth such
document prepared by the City of Scandia. It would amend the CIP included in the Comprehensive Plan
replacing Appendix F of the plan in its entirety.
What is a CIP?
A capital improvement plan (CIP) is a multi-year plan identifying capital projects to be funded during the
planning period. The CIP identifies each proposed capital project to be undertaken, the year the assets
will be acquired or the project started, the amount of funds expected to be expended in each year of the
CIP and the means of funding the expenditures. A CIP is not a static doc ument. It should be reviewed at
an appropriate cycle to reflect changing priorities, unexpected events and opportunities. The CIP should
include the maintenance, repair and rehabilitation of existing infrastructure as well as the construction
of new infrastructure. Including a project in a CIP does not commit the city to that project. The City
Council must specifically authorize each project and the associated funding before any project may
proceed. The basic function of a CIP is to provide a formal mechanism for decision making, a link to long
range plans, a financial management tool and a reporting document.
The Minnesota Land Planning Act requires that the implementation plan portion of the Comprehensive
Plan include a CIP for major infrastructure needs (transportation, wastewater, water supply, parks and
open space) for a five-year time period. Cities often expand the scope of their CIPs to include other
capital needs (major equipment replacements, for example) and sometimes look beyond the five-year
time period, up to 20 years in the future for some projects. Such projects represent more of a “wish-
list” that can be evaluated each time the plan is updated.
As a part of the Comprehensive Plan, the CIP has some legal standing. Minnesota Statutes Chapter
473.865 provides that “a local governmental unit shall not adopt any official control or fiscal device
which is in conflict with its comprehensive plan.” A fiscal device includes a budget or bond issue; so it is
important that the plan and CIP b e kept up to date and in synch with city budgets. Once the CIP has
been completed, it will be reviewed by the Planning Commission for consistency with the
Comprehensive Plan
Scope of the CIP
Scandia’s CIP includes all capital projects that cost at least $10,000 and have a useful life span of five
years or longer. Projects include all capital needs including major repairs to buildings and equipment
purchases and replacements. Any projects not meeting these param eters would be reviewed as part of
the annual operating budget, but would not be included in the CIP.
2
Funding Sources
The CIP identifies a possible funding source(s) for each project listed. The various funding sources are as
follows:
Capital Improvement Fund The City has been levying $30,000 per year in property tax to fund
these general capital projects.
Equipment Replacement
Fund
Most major equipment purchases are funded through the issuance
off debt which is then repaid with property taxes. Other sources
of funding include the sale of unused assets and transfers from
General Fund operating budgets.
General Fund Annual operating budget, primarily funded by property tax
revenues.
Park Improvement Fund The primary sources of funds are from park dedication fees paid
by developers as a part of any subdivision, revenues generated by
the park facilities, such as advertising revenues, and grant
revenues.
Local Road Improvement
Fund
This fund was established in 2014 to segregate funds for major
road improvement projects. The property taxes levy is the primary
source of funds with a base levy in 2016 of $581,000. Pursuant to
the City’s fund balance policy any general fund balance in excess
of 50% of budgeted expenditures can be transferred to this fund.
The 2017 transfer to this fund totaled $523,200. Additionally any
special assessments on the 2007 road improvement projects
received after the associated debt was retired are transferred to
this fund.
201 Sewer Funds come from fees paid by users on the 201 Wastewater
System which serves the Anderson Erickson and Bliss subdivisions.
Uptown Sewer Funds come from fees paid by users on the Uptown Wastewater
System
In addition to these sources, it is possible that future projects could be funded from donations, grants,
user fees or other sources not listed. Projects benefiting the utility funds, which are intended to
operate as stand-alone businesses supported by user fees, would be paid from the appropriate fund.
3
Project Priorities
Capital improvement projects should be prioritized in some way so that limited funding can be allocated to
those which are most important. This is difficult because the varying nature of the projects and their benefits
and objectives are so disparate as to be essentially not comparable. Some public agencies have developed
elaborate rating and ranking systems to try to set priorities. Complicated scoring systems may have some
disadvantages because they may give a false sense of objectivity or precision to the priority setting process.
Others use simpler systems, or simply do not try to compare projects that are like “apples and oranges.”
There is no accepted system or “industry standard” for prioritizing projects.
The following priority rating system was identified in 2008 and have been used in subsequent updates.
1 Critical or urgent, high-priority projects that should be done if at all
possible; a special effort should be made to find sufficient funding for all
of the projects in this group.
2 Very important, high-priority projects that should be done as funding
becomes available.
3 Important and worthwhile projects to be considered if funding is
available; may be deferred to a subsequent year.
4 Less important, low-priority projects; desirable but not essential.
N/A Used for replacements of existing equipment.
In reviewing the 2020 – 2024 plan, the Committee identified a scored evaluation criteria to be used if
evaluating projects if sufficient funding is not available:
Does the project help meet the goals of the Comprehensive Plan or City Priorities?
Does the project eliminate or prevent an existing health, environmental, or safety hazard?
Does the project protect and preserve the City’s infrastructure?
Does the project will have a positive, neutral, or negative impact on the City’s operational Finances?
Does the project leverage outside funding?
Does the project tie into other projects?
Can the project be completed in partnership with another organization?
Is the project mandated to comply with environmental standards?
Does the project support the City’s Green Cities efforts?
Project directly the allows the City to meet environmental compliance standards or meet sustainability
goals, where applicable?
Does the project help stimulate development or redevelopment of properties and/or encourage
economic development in the City corridors?
Does the project improve and/or increase the level of service provided by the City?
4
2020-2024 CIP OVERVIEW
For 2020 through 2024, the draft CIP includes projects with a total estimated cost of $6,967,900. All cost
estimates are preliminary and based on current dollars. No assumptions have been made about inflation. Project
costs will need to be updated annually, especially for projects in the first year or two of the plan. The decision
whether or not to replace a particular piece of equipment and what to replace it with will need to be made by the
City Council at the time of the purchase. The City could decide to keep some equipment longer than planned or
equipment could wear out more quickly than expected. It is likely that some items will not be replaced, or that
new technology or equipment could alter plans to replace a particular item.
The breakdown of recommended projects is shown by fund below:
The revenue sources for the projects shown below do not include the use of accumulated fund balances:
The table below summarized the revenue and expenditures and shows the impact on the cumulative fund balance
in the four capital project funds. The impact in each individual fund is shown later in this report.
Note that the cumulative fund balance in the capital project funds is projected to decrease from $2,935,756 at
12/31/2019 to $1,085,250 in 2024 of which $640,569 will be in the Local Road Improvement Fund leaving
$444,681 available for General Capital, Park Improvements, and Equipment Replacement.
A primary consideration in the review of the projects is the impact on the property tax levy. A breakdown of the
property tax levy needed to finance the recommended program and to service the debt issued to fund capital
projects in prior years is shown below:
Fund 2020 Budget 2021 Budget 2022 Budget 2023 Budget 2024 Budget
Capital Improvement 270,000$ 1,380,000$ 130,000$ -$ 223,000$
Park Improvement 73,800$ 150,400$ 55,900$ 78,840$ 64,960$
Equipment Replacement 256,000$ 136,500$ 273,500$ 250,000$ 30,000$
Local Road Improvement 637,000$ 895,000$ 643,000$ 715,000$ 705,000$
Total 1,236,800$ 2,561,900$ 1,102,400$ 1,043,840$ 1,022,960$
CAPITAL PROJECT EXPENDITURES BY FUND
Revenue Source 2020 Budget 2021 Budget 2022 Budget 2023 Budget 2024 Budget
Property Taxes 496,516$ 553,039$ 604,469$ 661,464$ 713,366$
Issuance of debt -$ 600,000$ 200,000$ 250,000$ -$
Park Dedication Fees 6,000$ 6,000$ 6,000$ 6,000$ 6,000$
Grants & Donations 32,180$ 504,680$ 24,680$ 37,500$ -$
Other 16,100$ 293,100$ 56,100$ 30,100$ 14,100$
Total 550,796$ 1,956,819$ 891,249$ 985,064$ 733,466$
CAPITAL PROJECT REVENUES BY SOURCE
2020 Budget 2021 Budget 2022 Budget 2023 Budget 2024 Budget
Revenue 550,796$ 1,956,819$ 891,249$ 985,064$ 733,466$
Expenditures 1,236,800$ 2,561,900$ 1,102,400$ 1,043,840$ 1,022,960$
Fund Balance 2,249,752$ 1,644,671$ 1,433,520$ 1,374,743$ 1,085,250$
CAPITAL PROJECTS TOTAL
Fund 2020 Budget 2021 Budget 2022 Budget 2023 Budget 2024 Budget
Debt Service Fund 498,730$ 449,028$ 527,531$ 513,054$ 479,748$
Capital Improvement Fund -$ -$ -$ -$ -$
Park Capital Improvement 30,000$ 30,000$ 30,000$ 30,000$ 30,000$
Equipment Replacement 30,000$ 30,000$ 30,000$ 30,000$ 30,000$
Local Road Improvement 436,516$ 493,039$ 544,469$ 601,464$ 653,366$
Total levy for capital projects 995,246$ 1,002,067$ 1,131,999$ 1,174,518$ 1,193,115$
Levy / $100,000 of 2019 taxable value 151.72$ 152.76$ 172.57$ 179.05$ 181.89$
5
The 2019 levy for the capital project purposes of $910,280 or $138.77 / $100,000 of valuation.
CAPITAL IMPROVEMENT FUND
The Capital Improvement Fund is utilized to fund projects that are not equipment related, do not have a
dedicated funding source, or rely on donations or grants to be funded.
The projects recommended from 2020 – 2024 are as follows:
The projected balance in the fund as of December 31, 2019 is $1,076,904. The balance is largely attributable to
the transfers from the General Fund of excess balances pursuant to the City’s fund balance policy. Similar
transfers of this magnitude are not anticipated in the future.
It is proposed that the design work for the Community Center Improvements be funded through the available
balance and the 2021 construction work be funded through the issuance of debt.
The implementation of the bliss addition stormwater construction in 2021 is based on obtaining grants for 87.5%
of the project cost ($435,000).
The second fire station is proposed to be located on property given to the City by the School District for use as
park property. That restriction will need to be released for the project to proceed. The Committee is proposing
that the second fire station be funded through the sale of the annex building (former fire station) on Oakhill Road.
The Committee is recommending that $100,000 be transferred from this fund to the equipment replacement fund
in 2021 to meet a shortfall in that fund.
Based on the proposed projects the available fund balance is projected to decrease to $303,404 by December 31,
2024.
2020 2021 2022 2023 2024
General
Bliss Addition
Stormwater construction 500,000$
Cold storage building 150,000$
Information Technology
Broadband Implementation
Community Building
HVAC & furnace replacement 30,000$
Community Center 100,000$ 600,000$
Fire
Emergency Generator 70,000$
HVAC replacement 25,000$
Parking lot 75,000$
Second fire station 180,000$
Roof replacement 100,000$
Weather siren - additional 25,000$
Exhaust removal system 48,000$
270,000$ 1,280,000$ 130,000$ -$ 223,000$
6
2020 Budget 2021 Budget 2022 Budget 2023 Budget 2024 Budget
Fund Balance $809,404 $649,904 $522,904 $525,904 $305,904
Revenue $3,000 $1,220,500 $3,000 $3,000 $3,000
Expenditures $270,000 $1,380,000 $130,000 $-$223,000
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
CAPITAL IMPROVEMENT FUND
7
EQUIPMENT REPLACEMENT FUND
The City created the Equipment Replacement Fund in 2007 to set aside funds on an annual basis for planned
replacement of vehicles and major pieces of operating equipment. Any revenues from the sale of old equipment
being replaced are also deposited into the fund. Beginning in 2015, the revenue to the fund was reduced to
reflect a new City policy of borrowing for equipment costing over $100,000 with the balance able to meet the
projected smaller equipment needs for 10 years. Beginning in 2017 $30,000 of property tax, which was previously
levied for the Capital improvement Fund, be allocated to the Equipment Replacement Fund.
The projects recommended from 2020 – 2024 are as follows:
The projected balance in the fund at 12/31/2019 is $244,977.
In order to fund the equipment purchases a transfer from the General Capital Fund of $100,000 in 2021 is
recommended.
Additionally the proceeds from the sale of equipment totaling $101,000 over the five years are also needed to
fund the equipment replacement.
It is anticipated that equipment certificates will be issued in order to fund the purchase of the plow truck in 2022
and the fire truck in 2023.
As recommended, the available fund balance at December 31, 2024 is projected to be $102,977.
2020 2021 2022 2023 2024
Public Works
Add loader to fleet 95,000$
Replace 1999 John Deere
6410 Tractor 98,000$
Replace 2010 Tiger ditch rear
mower 16,000$
Replace 2011 Tiger ditch
boom mower 17,000$
Replace 2011 Ford F250 +
plow 35,500$
F-250 plow assembly 8,000$
Replace 2011 Mack dump
truck & plow 208,500$
Replace 2017 Kubota 3990
mower w broom & blower 30,000$
Fire
Zoll monitor / defib 30,000$
Pagers 18,000$
Radio replacement 75,000$
Lund boat 25,000$
1995 Ford - Grass Rig #5175 - kept in service in 2018 40,000$
Replace 2003 Peterbuilt
Tanker - #5178 250,000$
256,000$ 136,500$ 273,500$ 250,000$ 30,000$
8
2020 Budget 2021 Budget 2022 Budget 2023 Budget 2024 Budget
Fund Balance $29,977 $31,477 $38,977 $93,977 $102,977
Revenue $41,000 $138,000 $281,000 $305,000 $39,000
Expenditures $256,000 $136,500 $273,500 $250,000 $30,000
$-
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
EQUIPMENT REPLACEMENT FUND
9
PARK IMPROVEMENT FUND
The Parks Improvement Fund is set up to use park dedication fees as the primary funding source. In 2019 a vacant
parcel of City property was sold and the proceeds allocated to the Park Improvement Fund. At 12/31/2018 the
Fund had a balance of $12,000 due to the Capital improvement Fund from an advance for the parking lot
construction at Lilleskogen Park.
The projects recommended from 2020 – 2024 are as follows:
In 2019 the City obtained a grant for habitat restoration at Lilleskogen Park. The grant is reimbursable based on
expenditures. The 2019 budget provided for $10,000 that will serve as the local matching share of this project
which is anticipated to be completed in 2022 with both the revenues and expenditures spread over the 4 year
period.
The projections assume an increase in the property tax levy of $30,000 be added to fund.
The revenue assumptions presume that additional funding through grants and donations totaling $132,500 will be
obtained. The ability to implement the listed projects is conditional on obtaining this funding. Projects
recommended based on obtaining 50% outside funding are the purchase of a new Zamboni, replacement of the
playground at the Community Center, replacement of the playground at the Wayne Erickson ballfield, and the
construction of a picnic shelter at Lilleskogen Park.
2020 2021 2022 2023 2024
Lilleskogen
Picnic shelter -$ -$ 30,000$ -$ -$
Woodland plantings and fencing 5,000$ -$ -$ -$ -$
culvert drainage ditch E. side -$ -$ 10,000$ -$ -$
Lilleskogen - wetland restoration 9,680$ 9,680$ 9,680$ -$ -$
Other improvements 2,500$ 2,500$ 2,500$ -$ -$
17,180$ 12,180$ 52,180$ -$ -$
Wayne Erickson
Bleacher / Concession improvements -$ -$ -$ 15,000$ -$
Playground replacement -$ -$ 75,000$ -$ -$
Ballfield fence -$ -$ -$ -$ 26,000$
-$ -$ 75,000$ 15,000$ 26,000$
Wojtowicz Ice Rink
Zamboni 45,000$
45,000$ -$ -$ -$ -$
Undesignated
Community Ctr playground -$ 115,000$ -$ -$ -$
Clearing and trails at nature
parks (Bone Lake, Big Marine
School site, Orwell Court) 10,000$
Settlers monument improvements 5,000$
Wind in the Pines sign 3,000$ -$ -$ -$ -$
Lions Park shelter - sign & stain 5,000$ 4,500$ -$ -$ -$
Amphitheatre -$ -$ -$ -$ 35,000$
8,000$ 134,500$ -$ -$ 35,000$
10
Based on the increased levy funding and the grants and donation the projected fund balance at 12/31/2024 will
be a $35,799.
2020 Budget 2021 Budget 2022 Budget 2023 Budget 2024 Budget
Fund Balance $106,140 $60,520 $66,900 $63,160 $35,800
Revenue $69,780 $104,780 $62,280 $75,100 $37,600
Expenditures $73,800 $150,400 $55,900 $78,840 $64,960
$-
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
PARK CAPITAL FUND
11
LOCAL ROAD IMPROVEMENT FUND
In 2008 the City adopted a Pavement Management Plan to extend the life of city streets and to reduce the
lifecycle costs for maintaining them in good condition. The City has endeavored to increase the budget for
contractual road maintenance and repairs. In 2014 the Local Road Improvement Fund was established to address
major repairs (reconstruction, mill and overlays, etc.) and is funded by the general tax levy. Regardless of these
efforts the PASER rating of City streets by the City engineer indicated that over 18% of the City streets were rated
very poor or poor and 37% rated fair. The 2018 – 2022 Capital Improvement Plan recommended that the City
issue debt to fund a program to address all roads that were in very poor or poor condition. Due to a favorable bid
the City was able to address over 15.96 miles of roads. In order to conserve the available resources the asphalt on
the roads that were in the 2018 program was reclaimed in place and the base amended as necessary before
paving. The cost for this work averaged $57.49 per linear foot of road. The cost for similar work in 2020 – 2024 is
estimated by the engineer to cost between $74 and $105 per lineal foot of road.
The roads that were previously rated fair or good will continue to deteriorate. The Committee has recommended
that for the years 2020 – 2024 an additional $55,000 be levied each year in order to fund road improvements.
The impact of the levy is shown on the chart below.
Based on an estimated 12/31/2019 fund balance of $1,504,215 and with the increased levy amount and the
proposed construction the balance at 12/31/2024 is projected to be $640,569.
Description 2020 2021 2022 2023 2024
Base 610,050$ 665,050$ 720,050$ 775,050$ 830,050$
Increase in base 55,000$ 55,000$ 55,000$ 55,000$ 55,000$
Sealcoat funds from General Fund 115,000$ 115,000$ 115,000$ 115,000$ 115,000$
Debt Service on bonds (343,534)$ (342,011)$ (345,581)$ (343,586)$ (346,684)$
436,516$ 493,039$ 544,469$ 601,464$ 653,366$
12
13
201 SEWER SYSTEM
Improvements to the 201 Sewer System are intended to be funded through user fees. The projects
recommended are shown below.
At the end of 2019 the cash balance in the 201 Sewer Fund is projected to be $4,675.
The Wastewater Advisory Committee has recommended a 5% rate increase for 2020 and extending that increase
out into the future to build an equipment reserve.
Based on the planned replacements in 2020 the fund would have a negative cash balance of $16,129 at
12/31/2020. The Committee recommended that an inter-fund loan be utilized in order to off-set any negative
cash balance.
The Anderson Erickson drainfield improvement would be used to make improvement to the drainfield and to
potentially add capacity. There is no immediate need for the A-E drainfield improvements and the amount shown
can be a placeholder for future improvements.
The MPCA permit for the Bliss addition requires the City to submit by September, 2019 a plan to address the high
levels of nitrate at one of the test wells. It is anticipated that there will be a time limit placed on the City in the
permit renewal process and the 2022 date is an approximation of when construction is anticipated. Low interest
rate debt and grant assistance may be available for the nitrate remediation project but are not included in the
2020-2024 projection. At current interest rates, the annual cost to service the full amount of debt for the nitrate
remediation project over a 10-year period would be roughly $72,000 / year, which would require a rate increase
of roughly 75%.
2020 2021 2022 2023 2024
Anderson / Erickson
Drainfield 200,000$
AE LS 1 Pump 2 12,000$
Bliss
Bliss LS 1 Pump 1 6,300$
Bliss LS 1 Pump 2 6,300$
Bliss LS 2 Pump 1 6,000$
Bliss LS 2 Pump 2 6,000$
Bliss LS 3 Pump 1 6,000$
Bliss LS 3 Pump 2 6,000$
Bliss LS 4 Pump 1 6,000$
Bliss LS 4 Pump 2 6,000$
Nitrate treatment 960,000$
-$ 36,000$ 960,000$ 212,000$ 12,600$
14
2020 Budget 2021 Budget 2022 Budget 2023 Budget 2024 Budget
Cash Balance $4,675 $(16,129)$(957,676)$(1,147,528)$(1,134,035)
Revenue $95,215 $99,746 $104,303 $109,298 $114,543
Expenditures $135,875 $134,250 $135,550 $136,850 $138,150
$(1,400,000)
$(1,200,000)
$(1,000,000)
$(800,000)
$(600,000)
$(400,000)
$(200,000)
$-
$200,000
$400,000
201 SEWER FUND
15
UPTOWN SEWER SYSTEM
Improvements to the Uptown Sewer System are intended to be funded through user fees. The projects
recommended are shown below.
The projected cash balance at 12/31/2019 is $5,689.
The replacement of the blower and pumps are schedule replacements at the end of the projected useful life.
The Wastewater Advisory Committee has recommended a 5% rate increase for 2020 and extending that increase
out into the future to build an equipment reserve.
Based on the increased revenue and the proposed capital expenditures the cash balance at 12/31/2024 is
projected to be a negative $6,399.
2020 2021 2022 2023 2024
Drainfield blower 4,000$
Replace Uptown pump 1 5,800$
Replace Uptown pump 2 5,800$
Replace Drainfield pump 1 5,800$
Replace Drainfield pump 2 5,800$
-$ 4,000$ 11,600$ -$ 11,600$