5.2. SR 11-08-2010Item # 5 , 2 ,
MEMORANDUM
TO: Mayor and City Council
FROM: Tim Simon, Finance Director
DATE: November 8, 2010
SUBJECT: 201 I-2015 Capital Improvement Plan (CIP)
The purpose of the discussion is to continue the review of preliminary information regarding
projects proposed in the 2011-2015 CIP. At the October 11, 2010 meeting we reviewed the
streets infrastructure, equipment replacement, parks improvements/replacements, GRE
reserve, and information technology portion of the 2011-2015 CIP. Tonight, we will
continue the discussion with the Government building fund, Ice Arena, and continued
discussion on the Street CIP portion.
Street Improvement Reserve Fund
At the prior meeting we reviewed the cash flows of the Street Improvement Reserve Fund.
Council had some discussion of a few other projects and City Engineer Justin Femrite has
put together the cost estimates along with the proposed timing on the additional items
discussed.
1) Add 1" Street to the 2011 reconstruction project - $50,000 (2011)
2) Trail along Proctor between Sauk driveway and 194`h - $150,000 (2013)
3) Trail along Business Center Drive from Joplin to Orono Park Trail - $100,000 (2012)
Municipal State Aid (Exhibit A)
A memo from Ciry Engineer Justin Femrite is attached outlining the proposed change to the
Municipal State Aid (MSA) allocation from 5% to 25% to complete more sealcoating, crack
filling, and street patching. In addition to Justin's memo we have included a five year
forecast on the MSA allocation.
Government Building Reserve Fund (Exhibit B)
This fund covers building construction and maintenance, landscaping, and small remodeling
projects for the municipal buildings. As discussed in the previous CIP we established setting
aside $50,000 annually for future building repairs. Aside from routine updates and
maintenance projects, the Council may want to discuss the timing of the public works
building project. Currently the planning team is working with SEH on a master plan. The
building is currently estimated around $8 million. The estimate may be adjusted as the
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2015CIPcondnuedl.doca
master planning process gets farther along. As previously discussed, we anticipate a
significant transfer from the municipal liquor fund to offset some of the costs of the project.
In addition, the fund has been dedicated to the library debt issue and at the end of 2015 the
outstanding balance is $2,845,553. After setting aside funds for emergency
repairs/replacements, very few projects have been programed into this fund based on the
estimated revenue stream and cash balance of $2,981,3$2. Given our good maintenance
program we don't anticipate any major repairs aside for the buildings getting older.
Ice Arena Capital Projects
Rich Czech will review the anticipated projects fox the Ice Arena over the next five years.
Rich was out of the office due to a family emergency and therefore the information will be
presented at the Council meeting.
The items discussed during the 2011 budget process include:
The Barn condenser which will be at the end of its life expectancy ($37,500)
An electric ice edger ($6,900)
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2015CiPcontinuedl.docs
EXHIBIT A
Elk MEMORANDUM
•~..~:
River
TO: Honorable Mayor and Members of the City Council
FROM: Justin Femrite, P.E., City Engineer
DATE: I I -8- I 0
SUBJECT: State Aid Maintenance Allocation
Over the last few months Phil Hals and I have spent considerable time reviewing the needs
for maintaining our street surfaces. We are continuing to work on a pavement management
plan in which we are completing a comprehensive surface evaluation of every street segment
in Elk River.
Of the approximately 150 miles of local roadways maintained by the street department, 144
miles, or 96%, are constructed with bituminous pavement. Research completed at local,
state and federal levels have all shown that with properly timed maintenance treatments, the
life of pavement can easily be doubled and in some cases tripled. The following chart was
developed by the Minnesota Department of Transportation Local Road Research Broad.
The red line shows the life of a pavement that receives no maintenance throughout its life.
This pavement reaches the point of needing reconstruction within 20-years. The blue line
identifies the pavement life of a street segment that receives a crack fill and sealcoat on a 7-
year rotation with two pavement overlays over the life of the street.
Maintenance Strategies
for t_ife Cycle Extension
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Pavement Age (Years)
MaiMenanr~ Strategies
+ROUtine Maintenance Oniy +sealcoat and Overlay
Based on the current data we have started collecting, the average pavement condition of our
street surfaces is 79. This number, according to the Maintenance Strategies chart on the
previous page, shows that most of our street segments are in good condition and are
recommended for localized maintenance and sealcoating. In an effort to keep our street
segments in this condition, we are proposing to increase the amount of streets we sealcoat
and crack fill on a yearly basis. We are proposing to increase the program so we can sealcoat
all streets every 7-years as recommended. This will be accomplished by putting more
resources into our sealcoat and maintenance program.
The current allocation for funding of the 2011 sealcoating program is as follows:
General Fund $136,700.00
Impact Fees $20,550.00
Total Available- $157,250.00
Miles of street that can be sealcoated in 2011 based on this budget- 8.1 Miles
To begin a 7-year sealcoating cycle we need to sealcoat around 20 miles of roadways per
year. To complete a sealcoating program that covers 20 miles of roads in 2011, we would
need an additional $230,000 in funding above what has already been committed.
We have not identified a funding source for the full deficit, but can obtain a large portion of
it by modifying our current State Aid allocation. We have historically requested 5% of our
allocation be distributed to us for maintenance purposes. This 5% amount was originally
estimated to be $57,000 and already included in the estimated revenue sources for the
General fund. This $57,000 is included in the $136,700 allocated for sealcoating in the
current Streets Budget. We are proposing to increase our State Aid Maintenance allocation
from the existing 5% request to the maximum 25% allowed. This change would increase
our general fund revenue from State Aid by $197,027. This will change the general fund as
shown in the following table:
Preliminary
General Fund 2011 budget Change Adjusted
State Aid Maintenance (Revenue) $57,000.00 $197,027.00 $254,027.00
Seal Coating (Expenditure) $136,700.00 $197,027.00 $333,727.00
This increase would allow the Street Department to seal coat about 18.25 miles of streets in
2011. While this is short of our 20 mile per year goal, it will allow for a program to have our
streets seal coated every 7 to 8 years. Attached is a five year forecast of our Municipal State
Aid allocation.
After next year's sealcoat project is complete, we will reassess the funding sources to insure
the changes are in line with the cycle we need to maintain.
I will be at the November 8, City Council work session to answer any questions or concerns
you have with the above.
MSA Fund Balance
Beginning balance
New Allotment(average)
Industrial Park improvements
193rd Construction Costs
Maintence (sealcoat/overlays)*
TRLF Payback
Ending Balance
Estimate Estimate Estimate Estimate Estimate
2010 2011 2012 2013 2014 2015
(169,007) - 6,717 279,475 577,183 1,396,498
1,023, 049 1,016,107 1,037,000 1,071,000 1, 092,420 1,114,268
- (250,000) - - - -
(310,608) - - - - -
(40,575) (254,027) (259,250) (267,750) (273,105) (278,567)
(502,858) (505,363) (504,992) {505,542) - -
0 6,717 -279,475 577,183 1,396,498 2,232,199..
*=25% of MSA allocation (2011-2015)
EXHIBIT B
11/04/2010
CITY OF ELK RIVER
Building Reserve Capital Budget
update 11,x4,`209 D Estimate Estimate Estimate Estimate Estimate Estimate
2010 2011 2012 2013 2014 2015
Beginning Cash Balance 2,427,130 3,014,660 3,550,249 4,147,971 3,808,166 3,632,339
Sources of Funds
Other Revenues 800,000 800,000 800,000 - - -
Bond Proceeds - 4;250,000 - - -
Fire Station #1 expansion from Ambulance 62,894 62,894 5,214 - - -
Grants 50,000 - - - -
Transfer In (Liquor Fund) 2,750,000 - - - -
Interest earnings 36,407 45,220 44,378 62,220 76,163 90,808
Total Sources of Funds 899,301 3,708,114 5,099,592 62,220 76,163 90,808
Expenditures
Old Liquor Store demo 15,000 - - - - -
Solar Thermal Project Grant - 100,000 - - - -
2nd Story on Public safety building - - - - - 100,000
Public Works Facility Expansion 15,000 2,750,000 4,250,000 - - -
Sealcoating program (Gov't buildings) 24,531 36,000 10,000 10,000 10,000 10,000
Prewetting station/Brining tank - - - 50,000 - -
Streets Roof repair 16,250 - - - - -
Station #1 Roof repair - - - 100,000 - -
Service doors at Fire Station - 25,000 - - - -
Floor repair PD - 20,000 - - - -
Miscellaenous projects (future building repair 10,000 10,000 10,000 10,000 10,000 100,000
2006C Bonds (Library Debt) 230,990 231,525 231,870 232,025 231,990 231,765
Total Building Reserve Uses of Funds - 311,771 3,172,525 4,501,870 402,025 251,990 441,765
Ending Cash Balance 3,014,660 3,550,249 4,147,971 3,808,166 3,632,339 3,281,382
Cash reserve balance for future repairs/maint. (50,000) (100,000) (150,000) (200,000) (250,000) (300,000)
Total cash available 2,964,660 3,450,249 3,997,971 3,608,166 3,382,339 2,981,382
Library Outstanding Balance call date 02/01/16 3,773,203 3,541,333 3,309,308 3,077,318 2,845,553
Estimate Debt Service (Public Works Building)
Rate Term
2012 Debt 5.00% 25
2013 Debt 5.00% 25
2014 Debt 5.00% (301,548) (301,548) (301:548)
- -
25 -
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Arena Capital Improvement Plans 2012 - 2016
Year: 2012 Replace Co Ray Vac pipes in the Barn estimated cost: $8,500
Year: 2012 Floor Scrubber $9,500
2013: Zamboni Battery $10,000
2016: Electric Ice Resurfacer: Estimated cost: $110,000 - $120,000
Other items to consider:
Year: 2013 Maintenance /Storage room Cost: 75,000 - 85,000
Year: 2013 Replace front entrance /lobby doors to the Olympic and Barn $12,000 -
$16,000
2014: New Heating System for the Barns Locker rooms: Estimated cost: $30,000 -
$50,000
Year: ?? Panting or re insulating of the Barn's ceiling Cost: Unknown
Year: ?? Front addition /lobby: Estimated cost: Unknown