02/07/2007 Council Packet - Laserfiche WebLink

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( 0--A2 % / 7 /o Staff Recommendation: While finance strategies are important for the general fund, this is the fund that is most focused upon during the budget cycle; it is the fund we are most aware of and that has the most direct tax impact. Staff recommendation is to monitor the general fund for possible weaknesses in the future and to employ the consultant's recommendations as needed to curtail any unfavorable affects. Facilities Replacement and Maintenance Nick pointed out that according to the square footage of our city building facilities and assuming a 40 year useful life, we should be putting aside about $175,000 per year for eventual replacement. He stated that all residents are beneficiaries of these facilities and that funding replacement solely from debt results in unequal payments from taxpayers. Finally, he stated that repair and maintenance (roofs, parking lots, flooring, etc.) is an annual cost that has not been budgeted and should be set aside each year. Staff Recommendation: We have recently performed some building maintenance on city hall and replacement of capital items from the Capital Improvement Fund. The major resource flowing into this fund is from antenna lease revenues — about $105,000 — 110,000 per year. Staff recommends that these funds be dedicated to the maintenance and repair and the eventual replacement of city building facilities. This amount can be supplemented with tax revenues in future years. Pavement Management Nick presented graphics which showed that the impact of following the city's Pavement Management Plan (PMP) for maintenance and reconstruction of the city's road infrastructure would save $11,000,000 over the next 10 years. Following the plan would also improve the average condition of the road system and spread the costs of maintenance and replacement more gradually through the use of debt financing. This has been an area that has been among the first to cut out of our annual budgets when we are looking for effective areas to cut; however, it also is among the greatest future cost impacts if not addressed as needed. The charter provisions relative to funding street reconstruction further inhibit the City Council's ability to initiate and complete these proj ects. Staff Recommendation: The City Council should recognize road maintenance and repair as a priority to avoid sharp increases in cost and tax impact in the future. Staff recommends budgeting annual road maintenance (seal coating, overlay, etc.) at the recommended level stated in the PMP, and to take a proactive approach to addressing necessary reconstruction projects, perhaps through a strong education and communication effort. SAC Revolving Fund Prior to the mid 1980's, it was the practice to collect the Metropolitan Council Service Availability Charge (SAC) charge with the issuance of a building permit regardless of whether utilities were available. The city accepted SAC refunds (about 900) from the Metropolitan Council in the late 1980's. In the early 1990's the City Council gave residents the option of whether they wanted to receive a refund or have the city pay their 2