4. Memo -1st Capital WorkshopPage 1 of 1
City of Scandia
14727 209th St. N., Scandia, Minnesota 55073
Phone (651) 433-2274 | Fax (651) 433-5112 | www.cityofscandia.com
DATE: Friday, July 29, 2022
FROM: Ken Cammilleri, City Administrator
TO: Honorable Mayor, City Council, and Capital Investment Committee
Members
RE: First CIP Workshop
Today’s budget activity is focused on establishing a funding strategy for capital projects and
to identify general capital budgeting priorities.
Last year, the City Council amended last year’s CIP to exclude the use of debt service to
finance future expenses. Now, the City must decide if this is the budgeting path going
forward.
Although interest rates are no longer as favorable as they were previously, borrowing could
allow for increased spending capacity, should the City desire to fund more projects. As the
City borrows, its debt levy will increase overtime, which will mean that a break period may
also be required to allow the City to financially catch up. The benefit to utilizing debt is that
saving the funding needed for a project up front is much harder than paying for it later
overtime.
Opting to go with no debt service will require the city to utilize more restrained spending in
order to continue to maintain a healthy financial condition. Last year’s budget expended
over 8% of the City’s cash and investment assets. Limited deficit spending, though
acceptable from time-to-time, can become a problematic habit.
Should debt service be reintroduced to our Capital Investment Plan, I would like to call
upon Ehlers to help us get started with the planning for some of the impending debt needs,
going out to bid for bonding needs for the Bliss Wastewater Treatment Plant Nutrient
Treatment Improvement Project.
This is also an important opportunity to share finding priorities Please review the priorities
of each of the listed projects or purchases. Do these reflect your priorities? Submitting your
rankings and comments on which years of implementation are preferred. The data collected
from this feedback, direction received on funding strategy, will be used to prepare a new
draft. Please submit your rankings to me by next Friday, so that these can be used to further
adjust this plan.
A follow up meeting will be scheduled for the week of the 14th of August.
Please let me know if you have any questions.