10-24-2012 Council Agenda - Laserfiche WebLink

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MEMORANDUM TO: Mayor Blesener and Members of the City Council FROM: Joel Hanson, City Administrator Sharon Provos, Finance Director DATE: October 22, 2012 RE: Proposed 2013 Capital Improvements Program Included in your agenda packet was the proposed 2013 Capital Improvements Program. As you know, this is a five year program with ratification of the coming budget year as part of this process, i.e. year 1 will be the approved program with years 2 through 4 being preliminary and subject to modification. Here is a summary by fund of noteworthy items: General Capital Improvement Fund - #400 Since meeting with the Parks & Recreation Commission, a couple of notable changes occurred to the revenue side of this fund. First, we removed $500,400 budgeted for the "Sale of Twin Lake Land" given this sale doesn't seem likely in the foreseeable future and likely not at that amount. Second, we added the General Fund Transfer of $373,660 approved at out last meeting. The net impact is a reduction in revenues available of $126,740. You will note that this causes the last year of the five -year program to go into a deficit. To resolve this, staff would recommend removing the lower Spooner Park Shelter in the amount of $200,000 in 2017. Another revenue improvement is the receipt of Local Government Aid (LGA) funding of $31,562 due to our plan to reduced General Fund dependence on LGA. As you know, we are slated to receive $195,843 of LGA in 2013. The LGA amounts act as "new money" to this fund. They are also at risk of State reductions due to formula volatility and State budget challenges. An option you could consider to achieve a quicker reduction of LGA reliance in the General Fund would be to put more LGA in the GCIP Fund and reduce the levy by a commensurate amount up to the current levy of $86,685 plus the $31,562 already planned. This would reduce General Fund reliance by $118,247 or 60 %. The levy from the GCIP would be added back to the General Fund to be a net wash in terms of dollars. If LGA were cut, we could decide where the impact would be felt given there would still be some LGA reliance in the General Fund. This action would help us to get to our goal faster, but it uses the $86,685 GCIP levy to accomplish that.