CC WORKSESSION 10312016 - Laserfiche WebLink

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To: Mark Casey From: Shelly Rueckert Re: Proposed 2017 Capital Funds Budget Date: October 24, 2016 The 2017 Capital Funds budget document as proposed is provided herein. The budgets in the document include: • Capital Equipment Fund • Building Improvement Fund • Park Improvement Fund • Stormwater Fund • Utilities Infrastructure Fund – Proposed • Street Improvement and Debt Service Plan Overview The Capital Equipment, Building and Parks Improvement Funds have been long standing capital funds used by the City. The Stormwater Fund was reconfigured in 2015 with the retirement of the bonds for prior stormwater improvements. The Utilities Infrastructure Fund has been prospective in nature for the last two budget document cycles. Therefore, any immediate utility capital needs budgeted have been funded by the Water Filtration Fund out of necessity. At the June 29th Council work session an increase of $75,000 was approved for the Capital Equipment Fund and is part of the 2017 preliminary levy. The purpose of the increase was to better meet the funding needs for equipment used in daily operations. Furthermore the transfer from the Community Center to the Building Improvement Fund has been scheduled to increase by $53,525 in 2017. This increase is feasible due to the renegotiated lease with the school district. With the pending redevelopment of the Lowry Grove site, significant park dedication fees have been forecasted for the Parks Improvement fund. The 2015 reconfiguration of the Stormwater Fund has allowed for stormwater charges to support current stormwater maintenance expenses and provide funding for the Debt Levy Reduction program. Additionally this fund manages the major stormwater improvement projects supported by grants from watershed districts and City bond proceeds. The prospective nature of the Utility infrastructure fund is being proposed to change retroactively to 1/1/2016. The proposed Utilities Infrastructure Fund formally establishes the capital fund which would support all capital needs associated with operating the water, sewer and fiber utilities. In prior years these needs have been supported by a combination of the Capital Equipment, Building Improvement and Water Filtration Funds. The benefit of a separate fund for utility operations capital needs is that it is managed to be supported by user’s charges versus tax levy. The steps to create this fund will be detailed later. The balance of this memo walks through the notable changes for each fund. The comprehensive course of action proposed is strongly recommended as a continuance of the efforts to realign revenue sources with appropriate needs and to create structural balanced funds that will be managed to a sustainable outcome.