07-12-2023 Workshop Packet - Laserfiche WebLink

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Factors that caused the deficit: • Adding approximately $1,000,000 in expenditures in the 2024-2032 CIP (9 years, 2033 is considered a wash with losing one-year 2023. 2033 Expenditures $2,431,480) A large portion relates to added inflation 1.4 million and a decrease 400K in current project costs. • Adding $513,000 of standalone storm water projects • Assumed $5,300,000 in MSA funds versus $4,000,000 in the new CIP. After a close evaluation of the MSA projected future draws, the City decided, beginning in 2024, not to draw more than its appropriated balance, approximately 400K each year. This approach will ensure available funds for any unforeseen expenditures (City ability to draw more than appropriated when needed) and will reflect accurately the total available funds for projects long term. • Change in beginning fund balance of $55,000 due to drawing $400,000 short in MSA funds in 2023. • $200,000 due to 2022 ending fund balance lower than anticipated. Options to address the deficit: 1) Transition stormwater infrastructure costs to the proposed storm water utility. Storm water costs for street project have historically been paid with funds from the Capital Infrastructure Fund 450. CIP projects include $2,412,000 for storm water infrastructure from 2024-2033: • $1,419,000 part of street projects • $200,000 inflationary cost • $793,000 of standalone storm projects City staff and City Council have been working towards the implementation of a storm water utility beginning with 2024 to fund infrastructure and maintenance of storm water related costs. If a storm water utility is implemented, all of the above expenditures of the 2024-2033 CIP street infrastructure projects will be finance with revenues generated from the storm water utility fee thus reducing the burden in fund 450. 2) Water and Sewer street project infrastructure costs financed with water and sewer generated revenues: Similarly, as noted above, water and sewer cost have been paid with funds from the Capital Infrastructure Fund 450 for all street projects. The 2024-2033 street projects include $288,400 of sanitary sewer costs, and $1,821,600 of water costs. Note if these costs are reallocated to the water and sewer funds there will most likely be an increase impact to the water and sewer future utility fees. Implementing this change, will reflect more accurately the cost that are incurred to operate the City water and sewer infrastructure. 3) Current franchise fee increases and possible implementation of a gas franchise fee: As noted above the last time the city has increased the electric franchise fees was in 2010. Since then, the cost related to infrastructure cost have increased significantly and revenues have remained static. City staff recommends a close evaluation of the current revenues generated from electric franchise fees and explore the option of implementing a gas franchise fee in order to meet the estimated deficit gap noted above.