9.b) Staff Report-Determine if Funds will be Added to Fire Truck Bond for Other Equipment such as the Dump Truck t� ��
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SCANDIA
Staff Renort
Date of Meeting: April 16, 2013
To: City Council
From: Kristina Handt,Administrator
Re: Determine if Funds will be added to Fire Truck Bond for other Equipment such as the Dump
Truck
Agenda Item#: 9.b)
Background:
As discussed at the April work session, per the 2013-2017 Capital Improvement Program, the
purchase of a third dump truck with plow to improve the speed of snow removal is planned for 2014.
The plan also identifies the debt service fund as the funding source. A copy of the 2013-2017 CIP
projects by funding source, as approved on December l 8, 2012, is included in your packet. You will
notice that the new Dump Truck was given a high priority rating.
Since interest rates are expected to rise, staff is asking the Council to consider adding this to the bond
for the fire engine. Minimal savings will also be realized in bond issuance costs by combining the
two. Issuing the bonds this year will still allow the City to purchase the truck in 2014 as originally
planned. Bond proceeds must be spent within three years of the City receiving them. There would
just be the interest payment in December 2013. Bond proceeds could be invested until used for the
purchase of the dump truck.
Issue:
Should the Council bond for the replacement Dump Truck with a Plow or another piece of
equipment at the same time as the bond for the new fire engine?
Proposal Details:
The CIP estimates the cost of a new dump truck with a plow at $200,000. Specific quotes have
not been obtained at this point but staff feels that amount is adequate. This new truck would
replace the 1997 Ford 5000 Dump Truck with Plow. Staff sees no reason to retain the 1997 Ford
once a new dump truck is purchased. The funds from the sale of the l 997 Ford truck could be
applied to the purchase of the new truck or deposited into the Equipment Replacement Fund.
This truck is important to the speed of snow removal in that it allows the maintenance staff to
operate three plow routes. This was the first year the City had three routes, as opposed to two,
and the Council should discuss whether or not they felt the third route improved snow removal
conditions. In most cases, all city streets were cleared within 4-6 hours of the end of the snow
event. If a new dump truck is not purchased, staff will go back to plowing City streets using only
two routes because of safety concerns with the 1997 Ford.
Additionally, having the third reliable truck is important in case one of the other two breaks
down and is out of service for some time. In that case, would the Council feel comfortable
having only one dump truck with a plow to clear all City streets?
If the Council would like to consider purchasing other equipment with the bond proceeds,they
could change the allocation at a later date. However, that must be done within 18 months of the
bond issue. Also,the Council should keep in mind that if$200,000 is added to the bond for the
dump truck at this time but the Council later decides to allocate bond funds to a different piece of
equipment and if that equipment costs less than the $200,000 the City will still have to pay
interest on the full amount and won't be able to pre-pay the bond until the call date. Therefore, it
is important the Council have an idea what equipment and the cost of the equipment it plans to
purchase in order to most efficiently utilize funds. Lastly, the Council should keep in mind that
the equipment it bonds for must have an expected useful life at least as long as the bonds (in this
case 10 years).
Fiscal Impact:
By applying fund balance to the 2005 G.O. Bond, the City is able to bond for additional
equipment without increasing the levy. The draft schedule of payments that includes the fire
truck and dump truck was prepared by Northland Securities and is included in your packet.
Also included on the schedule is a tax impact analysis. However,this does not take into account
pre-paying the 2005 G.O. Bond with current fund balance as previously discussed.
Options:
1) Direct staff to prepare the resolution and other documents to bond for the entire dump
truck with plow purchase.
2) Direct staff to prepare the resolution and other documents to bond for an amount less than
$200,000 for the dump truck with plow or other equipment with the remainder coming
from the Equipment Replacement Fund.
Recommendation:
Option 1.
, +
City of Scandia, Minnesota
Capital Improvement Program
2013 tluu 2017
PROJECTS BY FUNDING SOURCE
Source Pro.ject# Priority 2013 2014 2015 2016 2017 Total
Capital Improvement Fund �
Civil Defense Sirens F-009 2 7,500 7,500 7,500 7,500 7,500 37,500
Lighted Ball Field Improvements-Infield PR-007 3 7,500 7,500
Sidewalk,209th to South Bali Field PR-015 3 34,000 34,000
Sidewalk,Ballfield to Olinda Lane PR-016 3 79,000 79,000
Ozark Ave.Extension PW-003 3 333,333 333,333
Capital Improvement Fund Total 7,500 128,000 340,833 7,500 7,500 491,333
�ebt Service Fund -�
Street Maintenance Program PW-002 1 2,000,000 2,000,000
New Dump Truck/Plow(Replace 201-97) PW-006 1 200,000 200,000
Debt Service Fund Total 200,000 2,000,000 2,200,000
�Equipment Replacement Fund �
Tanker 5177 Replacement F-011 nla 180,000 180,000
Engine 5180 Replacement F-012 nla 300,000 300,000
Grass Rig 5175 Replacement F-013 n/a 60,000 60,000
John Deere Tractor Mower wlBroom&Blower(303-09) PW-005 nla 25,000 25,000
Tiger Boom Mower Attachment Replacement PW-008 nla 12,000 12,000
1999 JD-6410 Tractor Replacement(302-99) PW-009 n/a 60,000 60,000
2002 Sterling Dump TrucklPlow Replacement(202-02) PW-010 n/a 200,000 200,000
Equipment Replacement Fund Total 300,000 60,000 180,000 237,000 60,000 837,000
General Fund -`
Fire Station HVAC Replacement F-001 2 20,000 20,000
Street Maintenance Program PW-002 1 300,000 300,000 300,000 300,000 300,000 1,500,000
Lift for Public Works Garage PW-021 1 15,000 15,000
One-Ton F-550 WorkTruck PW-022 2 50,000 50,000
Air Compressor PW-023 3 17,000 17,000
Utility Truck with Crane PW-024 3 30,000 30,000
General Fund Total 3fi5,000 317,000 350,000 300,000 300,000 1,632,000
Grants/Donations `
Civil Defense Sirens F-009 2 22,500 22,500 22,500 22,500 22,500 112,500
Zamboni Replacement IR-002 nla 40,000 40,000
Lilleskogen Park Improvements PR-001 2 98,000 98,000
Lighted Ball Field Improvements-Infield PR-007 3 7,500 7,500
DRAFT for 20l3-2017 Update Thursday,Apri/11,2013
Source Pro.ject# Priority 2013 2014 2015 2016 2017 Total
Grants/Donations Total 120,500 30,000 22,500 62,500 22,500 158,000
Park Improvement Fund —�
Lilleskogen Park Improvements PR-001 2 5,000 47,500 36,000 88,500
Wind in the Pines Park PR-002 3 10,000 10,000
Park Improvement Fund Total 5,000 57,500 36,000 98,500
Sewer Fund(201) — �
Utility Truck with Crane PW-024 3 30,000 30,000
Sewer Fund(201)Total 30,000 30,000
GRAND TOTAL 798,000 792,500 2,959,333 601,000 390,000 5,546,833
DR,4FT for 2013-2017 Update Thursday,April 11,2013
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