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<br /> <br /> STAFF REPORT <br /> <br /> <br /> <br />TO: Mayor Keis and Members of City Council <br /> <br />FROM: Joel Hanson, City Administrator <br /> Sharon Provos, Finance Director <br /> <br />DATE: October 7, 2016 <br /> <br />RE: 2017 Budget – Capital Improvement Program Review <br /> <br /> <br />At Wednesday’s meeting, we will review the proposed Capital Improvement Funds that make up <br />the 2017 proposed budget. These funds include the following: <br />• General Capital Improvement Fund #400 <br />• 10% Gambling Fund #408 <br />• Infrastructure Replacement Fund #450 <br />• Park Land Acquisition Fund #456 <br />• Fire Equipment Replacement Fund #457 <br />• Owasso/Woodlyn Redevelopment Fund #474 <br />• Water & Sewer Capital Replacement Fund #604 <br /> <br />Some modifications to the numbers submitted with the preliminary budget have occurred based <br />on updated estimates of future costs or actual costs of 2016 expenditures. The key highlights for <br />each fund are as follows: <br /> <br />General Capital Improvement Fund - #400: <br /> <br /> The two primary sources of revenue for this fund are the General Fund excess surplus <br />transfer (based on the previous year’s budget performance) and the $243,733 of Local <br />Government Aid (LGA). For 2017, we have conservatively estimated a transfer of <br />$150,000 from the General Fund. <br /> We also show a transfer for Capital Projects, mainly coming from the Infrastructure Fund <br />(#450). It is a percentage amount of our current year’s project that was intended to <br />reflect administrative charges. Given the needs in both funds, it may not make sense to <br />transfer funds from one fund to the other. Rather, eliminating the transfer would reduce <br />paper work and let each fund function on its own. In the long-term, we believe some <br />levy increase may be necessary in each funds as costs continue to rise. The impact of this <br />change, if implemented, is shown on the sheets listed as Attachment #1. The Council <br />should comment on this matter. <br /> We programmed a lot of expenses in 2017 due to planned needs and to be more <br />aggressive in the Parks & Recreation area based on the Commission’s prioritization (see <br />Attachment #2). In the final analysis, we are likely to aggressive given a projected <br />deficit of $473,000 in 2021. While one can argue that future LGA receipts will more <br />than offset that amount, we also seem to add projects not previously in the five year