05-02-2016 WS - Laserfiche WebLink

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Vehicle and Equipment Replacement Plan The schedule has been updated to reflect retirements, new acquisitions, and changes to expected useful lives. The current amounts transferred to the Vehicle and Equipment Fund from the participating funds is sufficient to maintain replacement levels except for the General Fund. The General Fund amount was reduced to balance the budgets in 2010, 2011, 2012, and 2013 but has been systematically increased starting in 2013. There is an unfunded balance of $675,000 compared with the prior year of $175,000, replacement costs and useful lives were updated to reflect more accurate expectations. Impact on Capital Projects Funds’ Cash Balances: This presents the sources and uses and impacts to cash for the Capital Improvement Program on the four capital projects funds for the five year period of this report, 2017 thru 2021. Utility Rate Studies Rate studies are included for the utility funds. (Water, sewer, storm water, street light) The water and sewer rates should be considered for an increase in 2017. The water base rate is proposed to increase by $2 in 2017, which will add about $8 a year to the average bill. The rate tiers should be adjusted to reflect changes in water use and this will add $2.52 annually to the average user. The variable water rate can remain unchanged. The sewer rate is proposed to increase by 6% in 2017, which will add $18 a year to the average residential bill. The need for an increase in both the water and sewer funds is generated by significant capital expenses from deferred maintenance and increases in disposal charges by Metropolitan Council Environmental Services for the current and previous years. Future increases will need to be considered until both funds stabilize. The storm water rate can be maintained at the current level. Future increases will need to be considered in 2018 to prepare for the dredging of Silver View storm water pond in 2025 or later (approx. cost $2 million). The street light rate is proposed to increase by $.25 per quarter which will add $1 per year to residential utility bills. The increase is needed to support the transition to LED trail/sidewalk lighting. Water service repair insurance is currently $7.50 per quarter and we will need to monitor this for future increases. There have been significant increases in repairs that have occurred over the last three years. Five Year Financial Plan Adoption: The Five Year Plan is a blueprint for future years and is only one possible scenario. It is intended to be changed as priorities change and more current information becomes available. Staff welcomes Council comments and direction on any desired changes. Once adopted the five year financial plan will be published on the City’s website. Respectfully Submitted, Mark Beer