2. Capital Improvement Plan 2016-2020sip
SCANDIA
City of Scandia
Capital. Improvement Program
2016-2020
Recommendations from Capital Improvement Committee
June 3, 2015
CONTENTS
Introduction
Whatis a CIP?.................................................................................................................1
Scope of the Draft CIP.................................................... ...1
FundingSources..............................................................................................................2
ProjectPriorities.............................................................................................................. 2
2015-2019 CIP Amendments.............................................................................................3
2016-2020 CIP Overview
StreetProjects..................................................................................................................3
Equipment Replacement Fund........................................................................................4
Project Highlights by Department...................................................................................5
CIP Summary Data
Project Listing by Department (All Years).....................................................................
9
Projects and Funding Sources, 2016 thru 2020...............................................................11
Projects and Funding Sources, 2021 thru 2025...............................................................13
2016-2020 Capital Improvement Plan, Spending by Department ..........................15
Capital Improvement Fund, Spending by Department........................................15
Debt Service Fund, Spending by Department.................................................16
Equipment Replacement Fund, Spending by Department..............................................16
General Fund, Spending by Department ............................................. .......17
Grants/Donations, Spending by Department...................................................17
Appendix
Project Details, All Projects is
INTRODUCTION
The Capital Improvement Program (CIP) for the five-year period of 2016 through 2020 is the
seventh such document prepared by the City of Scandia. It would amend the CIP included in the
March, 2009 Comprehensive Plan (as amended through December 17, 2014) replacing Appendix F
of the plan in its entirety.
What is a CIP?
A Capital Improvement Program, or CIP, is a multi-year (typically 5 years) capital expenditure plan
for a City's infrastructure (such as streets, parks and utility systems), vehicles, equipment and public
buildings. It identifies the major projects needed and desired by the community, their potential
costs and how they would be financed. Including a project in a CIP does not commit the city to that
project. The City Council must specifically authorize each one, and the associated funding, before
any project may proceed. When the CIP is reviewed (ideally annually, in conjunction with the
budgeting process) projects may go forward as planned, advance ahead of schedule, be removed
entirely, or new projects may be added, depending upon changes in circumstances and priorities.
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 be kept up to date and in synch with city budgets.
The primary benefit of a CIP is as a financial planning tool, to help the city plan for the impact of
capital needs on future budgets and property taxes, and to help forecast the need for borrowing to
undertake major projects. The information developed as part of the capital planning process can
help document the need for various projects and help the City Council sort out competing priorities.
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 parameters would be
reviewed as part of the annual operating budget, but would not be included in the CIP.
Funding Sources
The CIP identifies a possible funding source(s) for each project listed. The various funding sources
are as follows:
Capital Improvement Fund Existing Cityfund, primarily from property tax levy, set
aside for capital projects.
Debt Service Fund Projects financed by borrowing, later to be repaid with
property taxes, and potentially special assessments
depending upon the characteristics of the project.
Equipment Replacement Fund Internal service fund used to segregate funds set aside for
planned replacements of existing major equipment. Funds
are transferred from operating budgets (primarily property
tax revenues.) The fund may also receive funds realized
through debt financing.
General Fund Annual operating budget, primarily funded by property tax
revenues.
Park Improvement Fund Existing Cityfund, receipts from cash -in -lieu of land park
dedication fees paid by developers and others who
subdivide their land.
Local Road Improvement Fund Existing fund, funded with unrestricted fund balance and
property tax revenues. To be used mainly to fund mill and
overlay and other similar street construction projects.
201 Sewer Funds come from fees paid by users on the 201 Wastewater
System
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 an enterprise or utility fund could
be paid from the appropriate fund.
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.
2
The Capital Improvement Committee developed the following priority rating system in 2008, which was
also used for the 2009 and subsequent updates:
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.
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.
2015-2019 CIP AMENDMENTS
The 2015-2019 CIP included $36,000 in expenditures for Lilleskogen such as site improvements to
be funded by grants and donations. The parking lot was anticipated to be completed in 2014,
however that did not happen. The Parks and Recreation Committee and the Capital Improvement
Committee are recommending an amendment to the 2015-2019 CIP to include the parking lot and
clearing of invasive species at Lilleskogen for 2015. The funding source for the parking lot would
be an advance of up to $35,000 from the Capital Improvement Fund to the Parks Capital
Improvement Fund. The advance would be paid back over the next few years as park dedication
fees came in. This was approved with the awarding of the parking lot bid by the Council on July
21, 2015. However, further discussion is needed on the clearing of invasive species as funding is
not available at this time.
2016-2020 CIP OVERVIEW
For 2016 through 2020, the draft CIP includes 23 separate projects with a total estimated cost of
$5,261,800. All cost estimates are preliminary and based on current dollars. No assumptions have
been made about inflation. It will be important to refine and update costs when the plan is
reviewed, especially for projects in the first year or two of the plan.
Some projects beyond the five-year planning period are also included in the CIP. Most of these
projects are replacements for equipment and vehicles (such as fire trucks) which may have a life
span of 10, 15 to 20 years or even more. The plan also includes "pending" projects for which
timelines (and in most cases, cost estimates) have not yet been identified. As more information is
developed about the need for, cost and possible funding sources for these projects, they will be
included in future CIP updates.
Street Projects
The draft update includes the following street projects in the CIP :
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PW -002, Street Maintenance Program. The current funding level ($330,000 per year) has
been maintained, with the addition of a $900,000 project in 2016 for a reconstruction of
236th, 237th and Novak. The reconstruction would be funded by the Local Road
Improvement Fund.
The goal of the 2008 Pavement Management Plan was to extend the life of city streets and to reduce
the lifecycle costs for maintaining them in good condition. Each year 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.
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. The fund receives
transfers from the operating budget of each department depending on its equipment needs. This
allows the departmental budgets for each major function to accurately show the costs of funding
that function, including equipment, while segregating the funds from the operating budgets. 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 significantly which will result in the need to borrow
for larger purchases in future years.
Just as for other capital projects, 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.
In 2015, the City transferred $20,000 to the fund. The draft 2016 budget and CIP show proposed
transfers of $20,000 in 2017 and subsequent years. The Capital Improvement Committee (CIC) is
recommending that the transfer be suspended for 2016 since adequate cash flow is available in the
fund. The chart below shows the cash flow in the Equipment Replacement Fund from 2016-2025
assuming a $20,000 per year contribution from 2017 and on. The lowest the fund balance would
reach under this scenario is $35,000 in 2024 but would continue to cash flow through 2025.
Because of the healthy projected fund balance, the CIC decided to establish the threshold for
borrowing for projects at those over $100,000 and suspend the annual contribution in 2016.
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$400,000
$350,000
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
Equipment Replacment Fund
2016-2025
otic oti` otic otic oti° otiti otic otic oti°� otic'
ti ti ti ti ti ti ti ti ti ti
=: Total $ Replacements
Funding
Balance
Project Highlights by Department
Fire:
➢ 12-15 SCBA and 30 Masks as well as the SCBA compressor replacements remain for 2017.
➢ Fire Hall HVAC replacement has been moved from 2016 to 2020
➢ The Chief's vehicle has been moved to pending
➢ The Civil Defense Sirens (tornado sirens) have been moved from 2019 to 2020
➢ The second fire station has been moved to pending until further research and analysis is
completed
➢ Radio replacements remain for 2018 but this is largely tied to the County's schedule for
replacement
➢ A fire training structure has been moved to pending
➢ The fire hall roof replacement remains for 2019
➢ In later years, the replacements costs have been updated for Tanker 5178 ($180,000 to
$250,000) and Engine 5176 ($600,000 to $700,000)
Fire Dept 2016-2020 CIP by Funding Source
Parks Can Imn
Fund, 0, (
Equip Replace
Fund, 275,000,
61%
Grants, 22,500,
qw-
General Fund,
20,000,5%
Service, 0,
0
Capital Imp Fund,
130,000,29%
General Fund Debt Service Capital Imp Fund
■ Equip Replace Fund F Parks Cap Imp Fund ■ Grants
Ice Rink:
The replacement of the Zamboni has been pushed back a few years to 2020, if grants/donations are
obtained. The Public Works Director believes it will last longer after the maintenance performed on
it these last few years.
Parks and Recreation:
➢ Lilleskogen Park Restoration remains the top priority for the Parks and Recreation
Committee. Assuming the 2015-2019 CIP is amended as stated previously, the
recommendations have been updated for years 2016-202 Ito complete the park
improvements. The wetland restoration activities in years 2016-2021 would be funded from
the general levy ($13,100 over six years) and all other updates (benches, picnic shelter
signage, boardwalk, etc) would be funded with grants and/or donations ($45,200).
➢ No changes were made for a full reconstruction of the tennis courts in 2018. Resurfacing
was completed in 2013.
Parks 2016-2020 CIP by Funding Source
Grants/Donations
,85,200,54%
Parks Capital Imp
Fund, 0, 0%
Equipment
Replacement, 0,
0%
General Fund
General Fund,
73,100,46%
Debt Service, 0,
0%
Debt Service
Capital Improvement Fund a Equipment Replacement
n Parks Capital Imp Fund . Grants/Donations
Capital
Improvement
Fund, 0, 0%
*Note: No Park Capital Improvement Funds are projected for project costs because they would be used to pay back the $35,000
advance to the Capital Improvement Fund, approved in 2015 for parking lot completion at Lilleskogen.
Public Works:
➢ The remaining Public Works projects are equipment replacements. Changes to the expected
useful life and cost estimates for several items have been made but do not have a significant
impact on the first 5 years of the plan from previous plans. The CIC is recommending the
grader be removed from the CIP and instead continue using it until it is no longer functional
or economical and then contract out for grading services.
rel
Public Works 2016-2020 CIP by Funding Source
Local Road Imp
Fund, 3,325,000,
63%
General Fund,
,620,000,30%
Debt Service,
200,000,4%
Equipment
Replacement,
167,500,3%
Grants, 0, 0
Parks Cap Imp
General Fund Debt Service Fund, 0, 0%
Capital Improvement Fund w Equipment Replacement
r Parks Cap Imp Fund % Grants
Local Road Imp Fund
201 Wastewater System:
➢ Capital Improvements for the 201 Wastewater System around Big Marine Lake include
updating the control panels on Bliss Lift Station 1 and 2 and the pumps on Bliss Lift Station
2 in 2017 to the new SCADA system implemented on the rest of the system in 2015. All
monies would come from the fund balance in the 201 Fund.
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