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HomeMy WebLinkAbout2012-11-26 PACKET 06.2.STAFF REPORT CASE: CP12 -031 ITEM: 6.2 PUBLIC MEETING DATE: 11/26/12 TENTATIVE COUNCIL REVIEW DATE: 12/19/12 APPLICATION APPLICANT: City of Cottage Grove REQUEST: A comprehensive plan amendment to adopt the 2013 -2017 Capital Improvement Plan (CIP). SITE DATA LOCATION: N/A ZONING: N/A CONTIGUOUS LAND USE: NORTH: N/A EAST: N/A SOUTH: N/A WEST: N/A SIZE: N/A DENSITY: N/A RECOMMENDATION Approval. COTTAGE GROVE PLANNING DIVISION Planning Staff Contact: John M. Burbank, Senior Planner: 651 - 458 -2825 or 0 burbank(cDcottage- g rove. org GACITYFILES\12 CITYFILES\031 CP CIP 2013 -2017 11 -26 -12 \Planning \CP12 -031 CIP 2013 -2017 SR cover 11- 26- 12.docx Planning Staff Report CIP 2013 -2017 — Case No. CP12 -031 November 26, 2012 Proposal On an annual basis, the City updates its five -year Capital Improvement Plan (CIP). In addition to being a guide for capital spending decisions, the CIP is an element of the Comprehensive Plan. For this reason, the annual update of the CIP is also an amendment to the Comprehen- sive Plan, which requires a public hearing by the Planning Commission. Overview of CIP The CIP is a planning document, intended to provide an estimate of capital needs and funding. Projects included in the plan must still be authorized by the City Council to proceed to construction. Capital improvements include land acquisition and construction of public buildings, parks, streets, and utilities. A capital improvement is defined as any expenditure greater than $15,000 with a useful life of five years or more. The CIP lists planned capital improvements for the years 2013 through 2017. The CIP also identifies funding sources for each project. For the 2013 -2017 period, a total of $96.2 million in capital projects are planned. A goal of the CIP process is to balance the amount of capital spending on an annual basis. This creates a more predictable demand on staff resources and creates consistency in capital funding. In most CIP's, the first two years serve as a work plan of projects ready to be implemented. Based on financial happenings with the economy, the City may at its discretion choose to delay or postpone projects to adjust to current conditions. Project Summary The summary document of the CIP as prepared by the Finance Department is attached. Recommendation That the Planning Commission find that the 2013 -2017 Capital Improvement Plan is consistent with the City's Comprehensive Plan and that the City Council approve the document. Prepared by: John M. Burbank, AICP Senior Planner City of Cottage Grove Capital Improvements Plan 2013 -2017 Introduction The Capital Improvement Plan (CIP) is a planning device to schedule proposed public improvements and purchases over a five -year period. The Plan matches proposed expenditures and revenues by project within an affected fund. A capital improvement is defined as a capital expenditure that is greater than $15,000 with a life expectancy of five years or longer. Capital improvements are projects, which require acquisition, construction, or replacement of various public facilities, public buildings, infrastructure, utilities and parks in the community. Every effort has been made to draft the document as conservatively and realistically as possible while maintaining the integrity of the funds. The concept of fund integrity includes accounting for certain project costs in particular designated funds that are only used for those purposes for which they are collected. These major funding sources include the operating funds (the General Fund and Enterprise Funds), the development fees and charges (including the Area and Park Trust Funds), as well as identifying larger general projects that are expected to be financed with the issuance of general obligation bonds to be repaid with future property tax levies. This CIP shows a total capital investment of $22 million for 2013 of which $7.4 million is related to the 2012/2013 Pavement Management project and $5.3 million is related to infrastructure improvements required by anticipated commercial /industrial development. This document covers the period from 2013 to 2017, but we have included the 2012 projects from last year's CIP for reference. If a project identified in last year's CIP as a 2012 project will not be started in 2012, it has been reflected in 2013 or later. The document is organized by the funding sources of the improvement project. Over the next five years $96.2 million in projected improvements have been identified. Included in this $96.2 million is $1.2 million that would be paid with levy dollars and another $32 million in levy supported debt. The remaining dollars come from other identified sources. One additional component of the CIP is to identify projects beyond the five year period. In this document, those projects total over $113 million in improvements. The majority of the projects identified as beyond 2017 will likely take the next 15 to 20 years to complete and will inevitably change over the years as Council priorities change. 2013 -2017 CIP Introduction Comparison of total funding by year to last years CIP 2012 2013 2013 -2017 CIP $ 19,180,700 $ 11,308,000 $ 2012 -2016 CIP $ 19,180,700 $ 11,308,000 $ 2014 2015 total 12 -15 oast 24,345,601 $ 10,695,932 $ 65,530,233 $ 148,076,200 24,345,601 $ 10,695,932 $ 65,530,233 $ 148,076,200 Difference ('11 to "12) $ - $ - $ - $ - $ - $ Summary of Improvements General (p. 42) The projects included in the General section are those projects which would be paid for from the City's General Fund. As the projects are considered they will need to be included in the general fund budget for that particular year. Sealcoating Fund (p. 44) The sealcoating fund was created in 2007 and the largest funding source for this fund includes the franchise fee on monthly electric and natural gas utility bills. The costs identified for this fund include the annual sealcoating program. At current fees, future year seal coating projects may need to be scaled back to maintain fund integrity. Ice Arena (p. 45) The Ice Arena Special Revenue fund replaced an Ice Resurfacer in 2012. Subsequent to that purchase, annual designations of fund set asides for equipment replacement will occur. A chiller system conversion from direct to indirect for $1 million is included in post 2017. Enterprise Funds The projects included in the Enterprise Fund section are those projects, which would be paid for from the Water, Sanitary Sewer and Storm Water Utility Funds. Each of the enterprise funds is supported by user fees charged for the services provided by each fund. Storm Water Utility (p.46) The Storm Water Utility Fund projects include various drainage improvements and maintenance of the storm water utility system. The Storm Water Utility Fund was initiated with the 2002 budget year. CIP projects identified and prioritized by staff cannot exceed the financial constraints of the fund. The 2013 projects identified include storm water improvements to be completed with the Pavement Management Project and various storm water ponds improvements. Commitments of the fund for the next five years are for various storm water activities throughout the City. Future adjustments to the storm water fee above the current $48 (annual) rate may be required to support funding of these commitments. Water Utility (p. 48) The major water utility fund improvement in the next five years is the repainting of a million gallon water tower for $550,000. Further included in the fund are costs for pulling one well for maintenance purposes each year at $70,000 and the utility portion of pavement management projects, totaling $260,000 in the next 5 years. The CIP also identifies a "Meter replacement program" beginning in 2013 at a cost of $225,000 per year for four years. This project anticipates replacement of all water meters in 2013 -2017 CIP Introduction the City which are over 20 years old. The details of this project (contracted service vs. in- house labor) have not been identified at this time so the cost and time estimate are subject to change. Sanitary Sewer Utility (p. 49) The sanitary sewer utility includes $1.7 million in projects to be completed in the next five years, of which $1.4 million are portions of projects completed along with pavement management projects. Street Light Enterprise (p. 50) The improvements scheduled for the Street Light Utility are traffic signals and system improvements including the potential replacement of luminaries with LED fixtures and feed point electrical work. Golf Course Enterprise (p. 51) The improvements scheduled for the Golf Course in the 2013 budget includes equipment replacement which will be funded with operating revenues of the golf course as they are available. Playground Equipment /Park Shelter Replacement /Public Landscape Initiative (p. 52 & 53) In 2004, the City Council established an ongoing levy of $100,000 to address deferred maintenance issues with city facilities including playground equipment replacement and /or park shelters. The funding for this was established at $100,000 in the 2004 budget. By the end of 2005, most of the playground equipment was replaced and attention was turned to the park shelters. Although the levy was zero for 2012, it is reinstated at $30,000 for 2013 and beyond. Over the next five years, potential costs are slated at $622,000; however these projects will only occur if adequate fund balance is available. Park Trust (p. 54) Improvements scheduled in the Park Trust Fund include the purchase of additional parkland, planning and development of parks and trails, and installing playground equipment in new parks. Revenues coming into the Park Trust Fund have been calculated to reflect the anticipated housing growth and a greater dedication of park land instead of park dedication fees. The goal of the City had been to maintain a minimum ending cash balance of approximately $100,000. The projected future balance also includes the proceeds from the Oakwood lot sale. These amounts have been earmarked for ball field improvements in Hamlet Park included in 2013 in this CIP. The 2012 CIP reflected the Hamlet Park expansion and Aquatic Facility expenditures in 2014 which were subject to a voter referendum. The failure of that referendum challenges the City Council to find another strategy before those projects are authorized. The 2013 -2017 CIP incorporates various individual projects which were parts of the referendum total beginning in 2014. 2013 -2017 CIP Introduction Building Replacement Fund (p. 56) This fund has accumulated annual transfers from the General Fund pursuant to the Fund Balance policy. This accumulated balance provided the initial funding for the construction of a Public Safety /City Hall project in 2011 -2012. Additional funding necessary for completion of the project came from an interfund loan, which will be repaid with property tax levy over a 20 year period. Subsequent to the completion of the construction project, this fund will account for repairs to municipal facilities which are not funded by another source. An annual levy is included beginning in 2013 to supplement transfers under the Fund Balance policy. Roadway /Street Construction Projects (p. - -) The projects listed provide for the construction of new and rehabilitation of existing streets in the Pavement Management Program as well as other street reconstruction projects. Funding for these projects come from Municipal State Aid (MSA), Developer Charges and Special Assessments. Streets included on the "state aid" system are eligible to receive state aid for a portion of the projects. The MSA annual construction allotment was $1.4 million in 2012 and anticipates a 2% increase in these dedicated funds per year. The projects noted below and in the CIP will depend on development, the timing of which will vary due to factors including the economy and available land. The MSA funded projects identified over the next 5 years include: 2013 Hinton Ave. Reclamation 2013 E Point Douglas 2013 90' Street, W of Jamaica 2013 70' Street 2014 Jamaica, 90' to 70th 2014 90' Street, Jamaica to Jewel 2014 Ravine Parkway, Phase 3 2015 80 St (CSAH 19 to TH61) 2015 73f to 70 2015 70 and Hardwood (city share) 2016 Hadley Avenue 2016 Ravine Parkway, Phase 4 2017 CSAH 19 and TH 61 Developer Initiated Projects and Pavement Management Projects are also reflected in this listing. The summary sheet identifies other funding sources when available, but for some projects it may be necessary to issue debt to be repaid with a property tax levy to finance the project. An example of these types of projects would be the continuation of the pavement management program, which includes assessments for a portion of each project. In addition to the Pavement Management projects, the developer initiated projects have been included in this document. The costs for these developer initiated projects are typically 100% assessed against the benefiting properties and the developer. Over the next 5 years, $40.6 MSA Portion 80" to 70 493,000 VFW to Wal -Mart 214,200 Mill & Overlay 175,000 Cost share 597,000 Mill & Overlay 500,000 Mill & Overlay 125,600 Upper Ravine District 1,000,000 Mill & Overlay 800,000 Sidewalk 42,500 Intersection improvements 1,000,000 90 to 100`" 1,900,000 Street, Upper Ravine 3,000,000 Overpass improvement 4,000,000 Total 2013 to 2017 $13,035,150 Developer Initiated Projects and Pavement Management Projects are also reflected in this listing. The summary sheet identifies other funding sources when available, but for some projects it may be necessary to issue debt to be repaid with a property tax levy to finance the project. An example of these types of projects would be the continuation of the pavement management program, which includes assessments for a portion of each project. In addition to the Pavement Management projects, the developer initiated projects have been included in this document. The costs for these developer initiated projects are typically 100% assessed against the benefiting properties and the developer. Over the next 5 years, $40.6 2013 -2017 CIP Introduction million in assessment projects have been identified; $23.7 million will come from assessments or other funding sources, including $13 million of developer initiated projects. The Pavement Management projects included in the next five years total $19.9 million, of which $8.4 million would be assessed to benefiting property owners and $6.9 million would be bonded. Future property taxes levies would repay these bonds. Pavement Management Location Map Location Total Funding Funding Other Debt levy 2013 Hinton (80th to 70th) reclamation st -78 Developer initiated location Total Assessments Other Comments 2013 East Ravine Various Locations $ 2,500,000 $ 2,100,000 $ 400,000 3,783,000 2013 East Pt Douglas (VFW to Walmart) 3,000,000 2,269,000 730,600 development fees, MSA 2013 100th Street (97th to Ideal) 2,325,000 780,000 1,545,000 area funds, MSA 2014 East Ravine Various Locations 2,500,000 2,100,000 400,000 2014 Oak Cove 350,000 350,000 2015 East Ravine Various Locations 2,500,000 2,100,000 400,000 2015 95th Street Phase 1 834,600 834,600 development fees, area funds 2015 Jamaica Ave, 70th to Military 3,480,000 960,000 2,520,000 Incl. $2.4M County share 2015 Hadley Avenue, 65th N to border 600,000 600,000 2016 Hadley Avenue, 90th to 100th 2,500,000 2,500,000 development fees, MSA 2016 East Ravine Various Locations 2,500,000 2,100,000 400,000 2017 CSAH 19 & TH 61 15,000,000 1,000,000 14,000,000 $10M State, $4M MSA 2017 East Ravine Various Locations 2,500,000 2,100,000 400,000 $ 40,589,600 $ 16,459,000 $ 24,130,200 The Pavement Management projects included in the next five years total $19.9 million, of which $8.4 million would be assessed to benefiting property owners and $6.9 million would be bonded. Future property taxes levies would repay these bonds. Pavement Management Location Map Location Total Assessments Funding Other Debt levy 2013 Hinton (80th to 70th) reclamation st -78 543,000 50,000 493,000 2013 Pinetree Pond East (E of Jamaica, N of C1 644,200 455,800 331,500 80th, W of Kingston) 3,783,000 1,381,000 168,000 2,234,000 2013 70th, W of Joliet) C2 3,636,000 1,575,000 136,000 1,925,000 2014 90th Street, Jamaica to Jewel 2014 S of 90th, E of Islay, N of Jareau 2015 S of 80th, E of W Central Corridor, W of E Central Corridor, N of Woodridge 2016 Various Areas Pavement Mgmt B1 2016 Hadley, W of Harkness Incl. Harkness 2017 Pavement Management F3 Total All Years -2012 to 2016 st -77 300,000 F1 3,025,800 F2 2,602,900 pm -b1 2,220,600 pm -D2 1,431,500 pm -f3 2,448,300 $ 19,991,100 $ 135,000 165,000 - 1,361,600 883,200 781,000 1,171,300 828,800 602,800 999,300 707,100 514,200 644,200 455,800 331,500 1,101,700 779,600 567,000 8,419,100 $ 4,616,500 $ 6,955,500 Area Funds The Water, Storm Sewer and Sanitary Sewer Area Funds are capital project funds that provide the resources to construct general infrastructure. Projects totaling $3.9 million are expected to be funded from the area funds over the next 5 years. The funding sources for these funds are area charges against developing properties. The area charges are based on rates established by the City Council. Before these projects can be completed, the funds available in each of the 2013 -2017 CIP Introduction area funds need to be considered. It may be necessary to postpone projects if the revenue sources are not available to complete the project. 5 year Summary Area Fund Projects East Point Douglas (VFW to Walmart) 100th Street (97th to Ideal) 2014 97th Street Extension 2013 Pond T6 -P14 (95th - Ideal) Expansion of Pond 2013 East Ravine Water Twr Land Acquistion 2015 Well 12 2015 95th Street Phl 2015 Jamaica 70th to Military Water Area Sewer Area Storm Area Total $ 238,000 $ 271,450 $ 11,900 $ 521,350 86,100 216,000 302,100 704,100 704,100 400,000 400,000 100,000 100,000 1,650,000 1,650,000 13,600 6,500 20,100 100,000 20,000 60,000 180,000 $ 2,187,700 $ 291,450 $ 1,398,500 $ 3,877,650 Water Area Fund (p. 58) The largest project in the water area fund for the next five years is an additional well for $1.65 million. The Water Area Fund summary page shows the projected cash balances in this fund. During the next five years, the Water Area Fund is expected to spend $1.9 million on improvements and at the end of 2017 a cash balance of $1.1 million will remain. A number of projects have been postponed from prior years because of the slowdown the construction industry. For example, a water supply and distribution plan was completed in January 2006 that indicated that the East Ravine water tower would be needed in 2010, based on development trends at that time. However, based on the reduction in new construction activity this tower has been postponed until after 2017. If resources are not available in the fund to complete the projects identified in the water supply and distribution plan then bonding may need to be considered. A new water treatment plant has been included in the post 2017 projects for $15 million. The construction of the water treatment plant will likely be funded with a combination of utility revenue bonds and area fund monies when the need arises. Sanitary Sewer Area Fund (p. 59) The projects identified for the Sewer Area Fund will have adequate funding through 2017 based upon conservative estimates and current rates. Bonds were issued for the construction of the trunk sewer line in the Upper Ravine District of the East Ravine that was completed in late 2007. The bonds will be repaid by the area charges collected as the Upper Ravine District is developed. The bond payments are included in the debt service column. Additional projects may be identified for this fund as future needs arise. Storm Water Area Fund (p. 60) The Storm Water Area Fund summary schedule includes $1.4 million in projects at this time for 2013 to 2017. There is adequate funding in the fund for these projects. However, if the projects identified are part of larger project (i.e. if they are part of a street reconstruction project) and the larger project is moved up it may be necessary to issue debt to finance and complete the project. The debt would then be repaid with future storm water area charges or storm water utility charges. There is an additional $22.1 million of projects identified beyond 2017. 2013 -2017 CIP Introduction Debt Schedule (p. 66) The included debt projection schedule anticipates issuing levy- related debt primarily to fund the pavement management program. Typically, with a pavement management project, special assessments against benefiting properties cover a portion of the cost (the CIP uses an assessment estimate of 45% as recommended by the IMTF task force) and the remainder of the construction cost is then paid through a property tax debt levy or from the utility funds. Pavement management related debt is matched to the assessment term, which is 15 years. The debt schedule below includes the current levy amounts for all bonds issued to date and includes estimated levies for the pavement management projects currently identified. Projects identified in the next 5 years include Pinetree Pond East (east of Jamaica, south and west of Kingston, and north of 80 Pinetree Pond East (Jenner, Jocelyn, and 79th Street: S of Kingston, N of 80 Pinetree Pond East (east of Jamaica, west of Joliet, south of 70 and north of Kingston) and West Central Draw (east of Jamaica, south of 70", and west of Joliet) pavement management districts, totaling $19.9 million in construction costs and requiring $10 million in new debt. Included beyond the year 2017 are pavement management districts totaling approximately $16 million more in construction costs and resulting in approximately $10.6 million more in new debt that would be issued to finance these projects. The future debt service includes estimated growth in the tax capacity of 0.6% in 2014 and 1% thereafter. Tax Capacity 2010 2011 2012 2013 2014 2015 Actual tax Base $ 28,727,814 $ 26,665,455 $ 24,496,075 $ 22,854,840 $ 23,000,000 $ 23,230,000 %Change -5.6% -7.2% -8.1% -6.7% 0.6% 1.0% Bonded debt as a percentage of market value is at .81% per year after 2012 which is the Median for AA1 Cities. The following General Levies are included to begin again in 2013 are as follows: Park shelter /landscape initiative Municipal Buildings Conclusion 2013 2014 and beyond $30,000 $30,000 30,000 30,000 City staff has prepared this document in conjunction with those projects and capital items that are known and for which costs can be reasonably estimated. The CIP should be considered a planning tool and the projects included for 2013 and 2014 serve as a work plan for staff. This "work plan" means that these are the projects that staff will bring to Council for authorization before proceeding with a feasibility study, acquisition, or construction. All projects detailed in this document will be included in their respective budgets if the need is established at that time.