4.1. SR 06-02-1997~,ty of
River
MEMORANDUM
Item# 6.
TO:
FROM:
DATE:
SUBJECT:
Mayor & City Council
Pat Klaers, City Administrator
May 21, 1997
Capital Improvement Program
A City Council Capital Improvement Program (CIP) meeting has been
scheduled for Monday, June 2, at 6 p.m., at City Hall.
The first order of business at this CIP meeting will be a review of the City of
Otsego Sanitary Sewer and Treatment Capacity Report. This document was
distributed to the City Council on May 5, 1997. Please bring this report to
the CIP meeting. Note that the report only considers a temporary situation
and that if capacity in the sewer treatment plant is provided to Otsego on a
permanent basis, then additional issues need to be taken into consideration.
The second item of business we need to review at the CIP meeting is the city
finances for the Ice Arena construction project as well as discussing the
Capital Outlay part of the operating budget. The construction budget will
not be final for a number of months, but everyone should know that the
construction went 1½ -2 percent over budget. The reasons include a small
beginning contingency budget and use of this budget for some "value added"
elements to the project which in turn left fewer funds for true contingency
expenditures. Some of these value added elements include the school
requested changes in the parking lot ($13,500), an increased area for
bituminous work in front of the arena ($8,000), the extra pumper for the ice
machine ($6,000), an additional row of bleachers ($2,500), the rubber floor
matting in the entrance ($9,200), and eliminating the step in the walking
track ($4,000). An additional reduction in the contingency fund of over
$11,000 was caused by new state code requirements which were approved
between the time the project was designed and construction actually took
13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 · TDD & Phone: (612) 441-7420 · Fax: (612) 441-7425
place. Finally, there were unforeseen difficulties in matching a new building
to an existing (metal) facility.
The source of funds for the $50,000 city contribution to the project was 50
percent from the Equipment reserves and 50 percent from the Capital
Projects reserve. The construction overrun is suggested to be split and
covered from the same reserve funds.
Two additional ice arena items need to be reviewed. These items are the
public address (PA) system and security (a key system for the doors). The
PA system is about $10,000 and it is not likely that we will get any school
contribution for this equipment. The security system being discussed is
somewhere between $4,000 and $12,000. Neither expenditure is in the
construction or operating budget, but both are necessary. Again the
Equipment reserves and Capital Project reserves are available for these
expenses.
The operation budget has no capital outlay category and one item that needs
discussion is a new (additional) Zamboni machine. A new propane machine
is about $60,000. The Ice Arena Commission is looking for information on
lease/purchase options.
Attached for your review is the DRAFT CIP Plan and the finances to
implement this plan. In using these two documents you need to cross
reference them to more clearly understand how projects are funded and how
the expenditure relates to the overall CIP finances. For example, identify a
specific 1997 project, then note the local financial contribution and its source,
and then identify this amount of money in the appropriate CIP Finances
page. Note that this draft plan is only offered to the City Council for
discussion and staff awaits direction from the Council on appropriate
changes. Nonetheless, some issues related to the draft CIP need to be
highlighted.
Please note the timing of the Tyler Street connection between
County Road 12 and 171st Avenue. It is proposed that this
project - the purchase of right-of-way and the construction of the
street - be programmed for the years 2000 and 2001. If the
timing of this project is to change, then this would impact the
planned use of MSA funds for Business Center Drive west of the
Government Center and Waco Street and the pedestrian bridge
over Highway 169. MSA money is the only known source of
funding for these projects and based on previous commitments
out of the MSA fund, it does not appear possible to do all of the
above projects in the next year or two. We can bond and
advance encumber monies for these projects, but even then some
of the above projects may still need to be delayed and we won't
have enough monies available for a number of years for other
projects. Staff needs help from the City Council in prioritizing
the use of MSA funds.
o
There is not enough money available to do all of the street work
that is desired or programmed. Please see the MSA, Capital
Projects, and Streets (landfill) finances pages. For example,
when you look at the Capital Projects page, you will see that
there are some 1997 planned expenses for Macon Street,
Riverview Drive, and the holding of trunk assessments in this
area that are not funded. Additionally, some extra Highland
Avenue street and sidewalk work is under consideration. This
lack of available funds is also true when you look at the Dodge
Avenue and 5th Street project (which most likely will not happen
until at least 1998). With regard to street projects, the City
Council needs to prioritize its goals and identify which street
work is most important. Another issue related to lack of funds
to do street work is the need to identify a long term recurring
source of revenues to finance necessary street projects. At the
first 1997 CIP worksession the idea of a city wide levy was
discussed, but with levy limits being required on cities, this
approach may no longer be a realistic.
It is planned that the use of the Development Fund will be for
industrial activities. It is suggested that this fund be used for
land acquisition and public improvements for industrial sites
which the city can market, or for public improvement
assessment agreements with cooperative property owners that
control industrial properties. The assessment agreement
approach is our preferred route for use of the Development Fund
and this may very well be what happens in the western area of
the city. If the Development Fund is used in this manner in the
near future, then the city has another financial concern as it
relates to the east Elk River trunk sewer and water project.
This east Elk River project is going to happen some time in the
near future, but all indications are that this project does not
cash flow based on $6,000 per acre being assessed out to the
benefited properties. This means that a city subsidy is required.
Depending on the scope of the project, the city subsidy could
approach the $1.5 million range and this subsidy is not located
anywhere in the CIP Plan. One possible source of funding for
this city subsidy is a city wide tax levy as this type of bond may
be outside of the levy limit restrictions (but this is unknown at
this time). If a smaller trunk sewer and water project which is
developer driven is authorized, then this project may be closer to
cash flowing, the city may be able to assess these benefited
property owners slightly more than $6,000 per acre, and the city
may have a smaller amount to subsidize. Again, the above
comments are just based on previous discussions and everyone
will know much more about the cost of this trunk sewer and
water project when the feasibility report is presented in July.
Nonetheless, we all need to start thinking about funding options
if a city subsidy, large or small, is needed for this project.
Once again, please note that the CIP proposal is just a draft and that staff
needs the City Council to think about a number of issues and give direction
to us on how to proceed. These issues are noted above and relate to the
timing of some major MSA funded projects, the funding of streets, the use of
the Capital Projects and MSA Reserve Funds, the use of the Development
Fund, and how the city should fund an east Elk River trunk sewer and water
shortfall.
XXelkriver\syskshrdoc\document\cipmm.doc
CAPITAL IMPROVEMENT PROGRAM (CIP) YEAR - 1997
PROJECT AND DESCRIPTION
NORTH JOPLIN STREET FRONTAGE ROAD AND
SIGNALIZED INTERSECTION AT HIGHWAY 10:
Construction of lateral sewer and water, surface water
management pipes and ponds, the north Highway 10
frontage road and installation of the signal.
WASTEWATER TREATMENT PLANT
EXPANSION:
The plant reconstruction will increase the capacity from
1.04 million gallons per day (mgd) to 1.64 mgd. The
project was started in 1996 and will be completed in
1997.
Capital Improvement Program (CIP) Year- 1997
COST AND FINANCING
The total project is expected to cost $800,000 with the city
financing $240,000 of this total, benefited property
owners being assessed $245,000, and the state paying the
balance, or $315,000.
City expenses of $240,000 are broken down into the
following categories: $81,000 for surface water
management; $81,000 for frontage road; $78,000 for
signal and intersection. The surface water management
expenses will come from the Surface Water Management
Fund, the frontage road expenses will come from the city
Capital Projects Fund, and the signalized intersection
expenses will also come from the Capital Projects Fund.
The city will bond for $245,000 in 1997. This amount has
been assessed to the benefited property owners. The
assessments will be on a 10 year repayment schedule.
This project started in 1996, and will be completed in
1997.
$3.5 million total project- $1 million will be paid from the
Wastewater Treatment Plant (WWTP) Reserves and the
$2.5 million balance has been financed through bonds
that will be repaid with WWTP operating funds and the
Sewer Availability charges (new hook ups into the
system). The bonds will be repaid over a 20 year period.
Page 1
PROJECT AND DESCRIPTION
NORTHBOUND LIQUOR STORE:
The construction of a new liquor store at the northwest
corner of Highway 169 and 193rd Avenue. The planning
and designing of this liquor store took place in 1996. The
construction will begin in spring, 1997, and the project
will be completed in fall, 1997.
197TH AVENUE SIGNAL:
Installation of a new signal in 1997 at 197th Avenue and
Highway 169.
ICE ARENA:
Construction of a second ice arena. This arena will be
connected to the existing Elk River Ice Arena. The
project was substantially completed in January, 1997,
and will be finalized by fall, 1997.
COST AND FINANCING
$1,400,000 - this project will be financed from Liquor
Store Reserves and Revenue Bonds.
The total project is expected to be $195,000. The street
and intersection reconstruction work was completed in
1996. The city share of the project is $48,750 and will
come from Municipal State Aid (MSA) funds. The state
(MnDOT) will finance $97,500 of the project and benefited
land owners will finance the remaining $48,750 of the
project.
$2.67 million excluding local contributions. Funding
sources are: $2.1 million in G.O. bonds based on available
revenues after expenses on an annual basis over 20 years;
$250,000 grant from the Mighty Ducks Program;
$200,000 contribution from youth hockey; $50,000
contribution from the Rogers Plastic Foundation; and
$70,000 contribution from the city. The city contribution
will come from the Equipment/Infrastructure and Capital
Projects Reserves.
Capital Improvement Program (CIP) Year - 1997 Page 2
PROJECT AND DESCRIPTION
RECREATION FIELDS:
Property was purchased in spring, 1996, for the
construction of soccer fields, youth baseball or softball
fields, and parking. This is a three year construction
project that began in 1996. Phase I is the parking and
baseball/softball fields.
COUNTY ROAD 1:
The expansion of County Road 1 from County Road 77 to
County Road 32 from a two lane to a four lane and from
a rural to an urban design. The project is to start in
1997 and be completed in 1998. In addition to this
expansion will be improvements at the County Road 1
and Highway 10 intersection that is planned to be
completed in 1997. A pedestrian trail will also be
constructed as part of the County Road I project.
BUSINESS PARK PHASE II:
The city has been petitioned by the county to extend the
frontage road and water to the County Government
Center. Sewer would also be extended to serve the
Gagne property. Storm sewer improvement would also
be constructed.
COST AND FINANCING
Phase I is $200,000 and will be jointly financed by the
youth soccer and baseball associations, the adult softball
association, and the city. The city will up front the entire
expense from the NSP-RDF annual contributions and
Park Dedication Funds plus the selling of one residential
lot. The city will receive $60,000 from the athletic
association over the next five years.
$1,100,000 - The County Road i project will be financed
100 percent by the county. The Highway 10 and County
Road I project will be split between the city, state, and
county, and the city's share of $70,000 will come from the
Municipal State Aid (MSA) Fund. The city and county
will split the cost of the trail and the city's $25,000 cost
will come from the Park Dedication Fund.
The city will assess the entire cost of $500,000 out to
benefited property owners ($190,000 to the county and
$290,000 to Gagne) except for about $20,000 in water
pipe oversizing that will be financed by the city Capital
Projects Fund. The city will bond for this improvement
and assess it out over ten years.
Capital Improvement Program (CIP) Year - 1997 Page 3
PROJECT AND DESCRIPTION
KING AND MAIN REDEVELOPMENT:
The city HRA has purchased three properties and is
working with a developer to redevelop this corner of the
downtown area. In 1997, the HRA will remove the
existing structures, prepare the site, and sell the
property to a developer for the construction of an office
complex.
SURFACE WATER MANAGEMENT PROGRAM:
Minor reconstruction of the southern part of Ditch 28
NAPLES STREET:
Reconstruction of a private gravel road to city gravel
road standards.
DODGE AVENUE AND 5TH STREET:
Reconstruction and expansion of the street with
sidewalks and street lighting. If a petition is received
soon, the planning will take place in 1997 and
construction will start and finish in 1998.
COST AND FINANCING
$426,000 - The HRA received a loan from the city for most
of this project and will repay the city over about a nine
year period. Approximately $225,000 will be recaptured
through the sale of the land to the developer. Excluding
this payment, the principal on the loan that the HRA
needed to pay offwas for about $177,000. The HRA has
already repaid $75,000 of this loan. The HRA will
recapture the funds with a TIF district.
$25,000 - the city will finance this through its Surface
Water Management Fund. (Major reconstruction of this
ditch will cost about $140,000 and may take place in 1998
or 1999)
$20,000 - from the city streets reserve. No assessments to
adjacent property owners, but the city receives street
easements in exchange for the improvement and this road
will become a city street.
$400,000 - $135,000 assessed out to benefited property
owners. This project would be bonded for in 1997 and the
bonds would be repaid through the collection of
assessments to benefited property owners over a five year
period. The city contribution of $265,000 will come from
its capital projects and street reserves.
Capital Improvement Program (CIP) Year - 1997 Page 4
PROJECT AND DESCRIPTION
COUNTY ROAD 12 TRUNK SEWER AND WATER
EXTENSION:
Construction of trunk sewer and water from the
treatment plant, across Highway 169 and the Hohlen
property, along County Road 12 to the Schultz property.
This construction project will not begin until 1998.
ELK RIVER BRIDGE RAILING:
Construct a railing on the south side of the bridge over
the Elk River located by the Lake Orono Dam.
SIMONET DRIVE:
The addition of a left turn lane on westbound Highway
10 at the Simonet Drive intersection.
HIGHWAY 169 SAFETY IMPROVEMENTS:
The installation of forty highway street lights and chain
link fencing on both sides of Highway 169 from Main
Street to 193rd Avenue. This project is scheduled to
begin in July, 1997, and be completed before winter.
COST AND FINANCING
$~/million- $ Vmillion will be assessed against the
benefited property owners and repaid over a 15 year
assessment period. The city will bond for this
improvement in spring, 1998, depending on ~vhen the
project is approved. The city's share of $ ~'~~o~l~
be paid from general tax revenues, a contribution from
the sewer fund, use of the city development reserves, and
annual contributions from the NSP-RDF program.
$21,000 - The city will use either its street or its capital
projects reserve fund for this expenditure.
$250,000 - This project will be 100% funded by MnDOT.
$200,000 for the lights - This will be 100% funded by
MnDOT and the city will be responsible for maintenance.
$160,000 for fencing - This project will be 100% financed
by MnDOT and the city will be responsible for
maintenance. Approximately $10,000 in city engineering
expenses, financed from the city street reserve, will be
required.
Capital Improvement Program (CIP) Year - 1997 Page 5
PROJECT AND DESCRIPTION
LOWELL AVENUE:
The reconstruction of Lowell Avenue between Main
Street and Highway 10.
JOPLIN STREET:
Reconstruction of Joplin Street between County Road 30
and Riverview Drive
ORONO LAKE 3RD ADDITION:
Installation of lateral sewer and water, storm sewer,
street lighting, and reconstruction of the streets to urban
standards.
COST AND FINANCING
$80,000 - $32,500 will be assessed to the benefited
property owners based on $42 per front foot. The $47,500
balance will be financed by the city with its capital
projects reserve.
$202,000 - 50% of this project will be financed by the city
with its capital projects reserve. The other 50% of this
project will be financed by the developer of the Country
Crossing 3rd Addition.
$425,000 - City will assess the entire cost of this project
out to the benefited property owners. In 1993, sewer and
water was installed into part of this addition and the
assessments were '~held" until the entire subdivision
received the municipal improvements. Accordingly, with
this project the city will begin receiving payments for
expenses incurred with the 1993 project. The benefited
property owners from the 1993 project are being assessed
$7,275 for this project and the other property owners are
being assessed $12,150 for the improvement project.
Capital Improvement Program (CIP) Year- 1997 Page 6
PROJECT AND DESCRIPTION
COUNTRY CROSSING 3RD OUTLOTS:
Installation of lateral sewer and water, storm sewer, and
street lighting and reconstruction of rural streets to
urban standards.
JARVIS STREET:
Expansion and reconstruction of the street from highway
10 to 156th Avenue.
HIGHLAND AVENUE SIDEWALK:
Construction of a sidewalk from Jackson Avenue to
Proctor Avenue on either the north or south side.
HIGHLAND AVENUE:
Reconstruction of Highland Avenue at the curve near
Jackson Avenue to provide better sight lines for traffic
movement.
COST AND FINANCING
$490,000 - This project was petitioned for by a developer.
The developer will pay 50% of the street and storm sewer
improvement project including the cost of the street
lights. The share of the street and storm sewer that is not
paid by the developer will be assessed out to the benefited
property owners. The city may contribute to the street
part of the project from its capital projects reserve. The
developer will also finance his prorated share of the costs
for the sewer and water. The city will "hold" the balance
of the sewer and water costs ($118,600) until the
benefited property owners decide to hook up or a larger
project affecting their neighborhood is approved by the
Council. These costs will be held in the city capital
project reserve.
$98,000 - The entire cost will be assessed out to benefited
property owners and no city contribution is anticipated.
$55,000 - The city will finance this project through use of
its capital projects and/or street reserves. Some
assessments to the benefited property owners may be
considered by the City Council.
$ ¥ - The project will be financed entirely with city
capital projects or street reserves.
Capital Improvement Program (CIP) Year - 1997 Page 7
PROJECT AND DESCRIPTION
HIGHLAND AVENUE WATER LINE:
Construction of a trunk water line from Proctor Avenue
to Jackson Avenue.
171sT AVENUE AND ULYSSES STREET PROJECT:
This street construction project started in 1996 and will
be completed in 1997. The project called for the
reconstruction of 171st to a 10 ton standard from
Highway 10 to the railroad crossing and also the
completion of Ulysses Street from 171st to the north into
the Rail 10 Industrial Park.
ELK RIVER/ORONO LAKE RIVERBANK
PROTECTION PROJECT:
Construction of Lake Orono rip rap to protect the
lake/riverbank near the cemetery.
MISSISSIPPI RIVERBANK PROTECTION
PROJECT:
Construction of rip rap along the Mississippi riverbank
just west of the central business district.
WASTEWATER TREATMENT PLANT TRUCK:
A sewer sludge tractor and tank.
COST AND FINANCING
$346,400 - This project will be bonded for by the city and
the Municipal Utilities will pay off this bond with water
connection fees and general water department revenues.
The balance of the city participation into this project is
$34,000 from its capital projects reserve and $65,000
from MSA funds. The majority of this project was
financed with city MSA funds which were advanced in
1996 from the 1997-98 allocations.
$16,000 - The city's share of $8,000 will be funded
through the capital projects reserve. The $8,000 balance
will be funded through a Sherburne County Soils and
Water Conservation Grant.
$50,000 - The city's share of $25,000 will be funded
through the capital projects reserve. The $25,000 balance
will be funded through a Sherburne County Soils and
Water Conservation Grant.
$100,000 - Wastewater Treatment Plant Reserves will
fund this expenditure.
Capital Improvement Program (CIP) Year - 1997 Page 8
PROJECT AND DESCRIPTION
CITY MAINTENANCE:
Overlay and seal coat city streets where necessary.
PARK IMPROVEMENTS:
Smaller park projects throughout the city park system.
EQUIPMENT:
Police vehicles, street/park trucks, and emergency
preparedness sirens.
COST AND FINANCING
$60,000 - General Fund budget.
$30,000 - City park dedication fees.
$220,000 - City General Fund budget, equipment
certificates and equipment reserves.
Capital Improvement Program (CIP) Year - 1997 Page 9
CAPITAL IMPROVEMENT PROGRAM (CIP) YEAR - 1998 1}~
PROJECT DESCRIPTION
COMPLETE 1997 PROJECTS:
County Road 12 trunk sewer and water extension.
Dodge Avenue and 5th Street project
County Road I project
Year three (final year) of recreation fields Phase I project
Business Park Phase II
WESTERN AREA PHASE III:
Construction of trunk sewer and water and storm sewer
west from Sandpiper Estates Subdivision to Waco Street.
Lateral sewer and water and storm sewer will be
constructed under Waco Street north to Highway 10, and
this street will be reconstructed to urban standards.
Business Center Drive with lateral sewer, trunk water,
and storm sewer will be constructed from the
Government Center west to Waco Street.
SCHOOL STREET EXPANSION:
Expansion of School Street from two lanes to four lanes
from County Road I to the east to where four lanes end
at the Senior High School. This project will include some
reconstruction of the School Street/County Road 1
intersection and of School Street west of County Road 1.
COST AND FINANCING
SEE 1997 CIP NARRATIVE
$1,300,000 - Trunk sewer and water will be assessed
out to benefited property owners. Lateral sewer and
water extensions will also be assessed out to benefited
property owners. Street and storm sewer will also be
assessed out, but some city participation with MSA
funds and MnDOT participation is expected. The city
may enter into an assessment agreement with the
Business Park landowner in order to encourage an
Economic Development partnership. City financial
participation in the assessment agreement would come
from the city development reserve fund.
$250,000 - The city will assess 50 percent of the project
to benefited property owners. This $125,000 amount
will be bonded and repaid over a ten year period. The
city share of $125,000 will be financed with municipal
state aid funds (100,000) and city street reserves
(25,000).
Capital Improvement Program (CIP) Year - 1998 Page I
PROJECT DESCRIPTION
COUNTY ROAD 12:
The county will reconstruct County Road 12. No
expansion of the road or realignment of the road is
anticipated beyond the Schultz property. Between the
Schultz property and Highway 169 an urban designed
project is anticipated along with a trail.
UPLAND AVENUE INTERSECTION AND SIGNAL:
Reconstruction of Upland Avenue and installation of a
signal at the Highway 10 intersection. This work
includes improvements along the frontage road on the
north side of Highway 10.
LIONS PARK SKATING RINK:
Installing concrete and permanent boards and fencing in
the outdoor skating rink in Lions Park for ice skating in
the winter and skateboarding in the summer.
VILLAGE ESTATES, ULYSSES STREET, AND
HOBBIT HILLS OVERLAY:
One and one-half inch overlay street improvement
project.
COST AND FINANCING
$800,000 - This project will be 100 percent financed by
the county except the trail component which will be
split by the city and county. The city share of $15,000
will come from park dedication fees. Some extra street
design components may be requested and paid for by
the property owner to the south (Hohlen).
$470,000 - The signal will be $200,000 and 50% will be
paid by the state, 25% by the county, as Upland is a
county road, and 25% by the city. This $50,000 signal
expense of the city will be financed with MSA funds.
The $270,000 street work for the frontage road and
intersection improvements will be jointly financed by
the state and the county. Some minor expenses on the
south part of Highway 10 will be financed by the city
with its capital projects or street reserves.
$45,000- This will be a city expenditure, $30,000 of
which is for concrete, out of the city park dedication
fund and from donations from local organizations (i.e.
American Legion, Lions Club, Elk River Bowl, etc.)
$180,000 - the city will bond for this project in the
summer of 1998. Assessments to the 140 benefited
property owners will pay off this bond over a five year
repayment schedule.
Capital Improvement Program (CIP) Year - 1998 Page 2
PROJECT DESCRIPTION
PARK IMPROVEMENTS:
Phase II of the recreation complex development which
emphasizes soccer fields; the bituminous surfacing of the
railroad trail from School Street to County Road 33; and
the construction of a pedestrian trail along County Road
44 from Highway 10 to County Road 1; and the purchase
of land and development of a park on the east side of
Highway 169.
SURFACE WATER MANAGEMENT:
Installation of a culvert under the railroad crossing on
the east side of Highway 169 near Ditch 10.
CITY MAINTENANCE:
Overlay and seal coat City streets where necessary
PARK IMPROVEMENTS:
Smaller park projects throughout the City park system
EQUIPMENT:
Police Vehicles
Street/Park Truck
Emergency Preparedness Siren
Park Mower
COST AND FINANCING
THESE PROJECTS WILL ONLY TAKE PLACE IF A
PUBLIC REFERENDUM BOND IS APPROVED BY
THE VOTERS... $110,000 for Phase II of the recreation
complex; $95,000 for the railroad trail bituminous
surface; and $83,000 for the County Road 44 trail; and
$100,000 for the East Highway 169 Park.
$100,000 - The developers of the Hohlen property will
pay a share of this project with the city surface water
management fund paying the balance.
$60,000 - General Fund Budget
$30,000 - City Park Dedication Fees
$220,000 - City General Fund Budget, equipment
certificates and equipment reserves.
Capital Improvement Program (CIP) Year - 1998 Page 3
CAPITAL IMPROVEMENT PROGRAM (CIP) YEAR - 1999
PROJECT DESCRIPTION
COMPLETE 1998 PROJECTS:.
Western Area Phase III trunk sewer and water project
County Road 12 project
Upland Avenue and Highway 10 intersection and signal
HIGHWAY 169 PEDESTRIAN BRIDGE:
Construction of a pedestrian bridge just north of School
Street over Highway 169 from the city water tower
property to the MnDOT maintenance garage property.
SURFACE WATER MANAGEMENT PROGRAM:
Major reconstruction of the southern part of Ditch 28.
Install a larger culvert under the railroad crossing at
County Ditch 10 to control the increased surface water
flow generated by residential and commercial
development projects.
OLD CORE VILLAGE STREETS/SIDEWALKS:
Year one of a five year reconstruction plan of the old core
village streets and sidewalks.
COST AND FINANCING
SEE 1998 CIP NARRATIVE
$740,000 - The state will finance $400,000 of this project
and the city will finance the balance through local
contributions (fundraising efforts by the Chamber of
Commerce) and Municipal State Aid funds.
$140,000 - The city will finance this through its surface
water management fund.
$110,000 - Surface Water Management Fund
Total project is $800,000 plus...Phase I is $175,000 with
50% to be financed by the city through its capital
projects and/or street reserves and 50% to be assessed
out to benefited property owners.
Capital Improvement Program (CIP) Year ~ 1999 Page I
PROJECT AND DESCRIPTION
MISSISSIPPI RIVERBANK PROTECTION
PROJECT:
Construction of Mississippi River rip rap to protect the
riverbank just west of the central business district area.
FIRE DEPARTMENT TANKER TRUCK:
New truck for the fire department to help provide water
to fight fires in the rural area.
CITY MAINTENANCE:
Overlay and seal coat City streets where necessary
PARK IMPROVEMENTS:
Smaller park projects throughout the City park system
EQUIPMENT:
Police Vehicles
Street/Park Truck
Emergency Preparedness Siren
COST AND FINANCING
$40,000 - The city share of $20,000 will be funded
through the Capital Projects Reserve. The balance of
$20,000 will be funded through a soils and water
conservation grant.
$75,000 - Financed through city equipment reserves.
$60,000 - General Fund Budget
$30,000 - City Park Dedication Fees
$250,000 - City General Fund Budget, equipment
certificates and equipment reserves.
Capital Improvement Program (CIP) Year- 1999 Page 2
CAPITAL IMPROVEMENT PROGRAM (CIP) YEAR- 2000
PROJECT DESCRIPTION
COMPLETE 1999 PROJECTS:.
Highway 169 pedestrian bridge.
CENTRAL BUSINESS DISTRICT SIDEWALKS
AND MISSISSIPPI RIVER PATH:
Construct a pathway along the Mississippi River in the
central business district between Jackson Avenue and
King Street. Replace the sidewalks in the central
business district.
VICTORIA LANE, KENT STREET, LANDER
STREET, AND 191ST AVENUE OVERLAY:
One and one-half inch overlay street improvement
project.
TYLER STREET:
Acquire the right of way for the construction of Tyler
Street from County Road 12 to 171st Avenue. This
project could include up to three houses and 25 acres of
land.
COST AND FINANCING
SEE 1999 CIP NARRATIVE
$100,000 for the sidewalk replacement to be financed by
the city with Capital Projects Reserves. $100,000 of the
pathway project to be financed with NSP-RDF
contributions. The $400,000 balance of the pathway
project will come from a voter approved public
referendum bond. If the referendum is not approved,
then the project will be done in phases using park
dedication and NSP/RDF funds. The Utilities
department also has expenses (approximately
$200,000) for relocation of electric lines.
$80,000 - The city will bond for this project in the
summer of 2000. Assessments to the 50 benefited
property owners will pay off this bond over a five year
repayment schedule.
$300,000 to $900,000 - This entire project is scheduled
to be financed with Municipal State Aid funds but
sections of the street may be constructed by developers.
Capital Improvement Program (CIP) Year - 2000 Page 1
PROJECT DESCRIPTION
ICE ARENA:
Complete Phase II of the project which calls for
installation of seating and heating on the east side of the
arena.
OLD CORE VILLAGE STREETS/SIDEWALKS:
Year two of a five year reconstruction plan of the old core
village streets and sidewalks.
PARK IMPROVEMENTS:
Acquisition of park land, trail land and improvement of
trails.
CITY MAINTENANCE:
Overlay and seal coat City streets where necessary
PARK IMPROVEMENTS:
Smaller park projects throughout the City park system
EQUIPMENT:
Police Vehicles
Street/Park Truck
COST AND FINANCING
$260,000 - This project would be jointly financed by the
city and youth hockey. The city share, estimated at
50%, would come from the NSP/RDF contributions.
Total project is $800,000 plus...Phase II is $150,000
with 50% to be financed by the city through its capital
projects and/or street reserves and 50% to be assessed
out to benefited property owners.
THESE PROJECTS WILL ONLY TAKE PLACE IF A
PUBIC REFERENDUM BOND IS APPROVED BY
THE VOTERS...$130,000 for park land, $80,000 for
trail land, and $90,000 for trail development.
$70,000 - General Fund Budget
$35,000 - City Park Dedication Fees
$230,000 - City General Fund Budget, equipment
certificates and equipment reserves.
Capital Improvement Program (CIP) Year - 2000
Page 2
CAPITA~ IMPROVEMENT I-'ROGRAM (CIP) YEAR - 2001
PROJECT DESCRIPTION
COMPLETE 2000 PROJECTS:.
Central Business District sidewalks and Mississippi
River path.
NORTHVCEST AREA WATER TOWER WELL AND
TREATMENT BUILDING:
Construct a well, tower, and treatment building in the
northwest area of the urban district.
FIRE DEPARTMENT SATELLITE FACILITY:
Construction of a satellite fire station in the
northwestern part of the community. THIS PROJECT
WILL ONLY PROCEED IF APPROVED BY A PUBLIC
REFERENDUM.
COMMUNITY CENTER:
Construction of a community center and outdoor pool.
THIS PROJECT WILL ONLY PROCEED IF
APPROVED BY A PUBLIC REFERENDUM.
OLD CORE VILLAGE STREETS/SIDEWALKS:
Year three of a five year reconstruction plan of the old
core village streets and sidewalks.
TYLER STREET:
Construct Tyler Street from County Road 12 to 171~t
Avenue. Project includes a pedestrian trail.
COST AND FINANCING
SEE 2000 CIP NARRATIVE
$1 million - The city will bond for this project in 2001
and these bonds will be repaid from annual water
utility revenues over a 15 year period.
$1 million - Will be funded by a general tax levy
through a voter approved public referendum bond.
$4 million - Monies will come from a general tax levy if
the voters approve a public referendum bond for this
project.
Total project is $800,000 plus...Phase III is $150,000
with 50% to be financed by the city through its capital
projects and/or street reserves and 50% to be assessed
out to benefited property owners.
$1.5 million- will be funded through a development
project and with City MSA funds.
Capital Improvement Program (CIP) Year - 2001 Page i
PROJECT AND DESCRIPTION
CITY MAINTENANCE:
Overlay and seal coat City streets where necessary
PARK IMPROVEMENTS:
Smaller park projects throughout the City park system
EQUIPMENT:
Police Vehicles
Street/Park Truck
COST AND FINANCING
$70,000 - General Fund Budget
$35,000 - City Park Dedication Fees
$190,000 - City General Fund Budget, equipment
certificates and equipment reserves.
Capital Improvement Program (CIP) Year - 2001 Page 2
NON-PROGRAMMED PROJECTS
STREETS:
Railroad Drive and 3rd Avenue Reconstruction
Highway 10 and Main Street Reconstruction
3rd and Gates Avenue Reconstruction
Evans Avenue south of Main Street Reconstruction
King Avenue Reconstruction
Old Core Village Streets and Sidewalk Reconstruction Program
Liquor Store Road Reconstruction
Alley Improvements
Old Township Roads:
173rd/175th Easements
173rd/175th Reconstruction
225th Reconstruction
213th Reconstruction
Cleveland Avenue Improvements
Edison Avenue Improvements
Concord Street (private road)
Long Range Transportation Plan Routes:
193rd Avenue
201st Avenue
County Road 31 Extension
Zebulon or Waco Street Bridge
Filmore Street Extension
Emergency Vehicle Preemption Signal System
PARK & RECREATION:
Orono Park West Expansion
Railroad Trail Improvements
Central Business District Park and Trail
Athletic Complex Development
Riverbank Protection Program
Orono Lake Dredging Program
PUBLIC IMPROVEMENTS:
Assessment project initiated by the City
Assessment projects requested by developers
COMMUNITY FACILITIES:
Community Center
Senior Center
Youth Center
Police Gun Range
Fire Department Satellite Station
Westbound Liquor
MAJOR EQUIPMENT PURCHASES:
Street Sweeper
Street Grader
WWTP Jet Truck
Computer System
All of the listed non-programmed projects have been previously discussed by
the City Council at one time or another. Some of these projects are very high
priorities, but no funds are currently available to finance the project. The
projects listed can, and most likely will, change in scope from the initial
discussions depending on the perceived need for the project, the priorities of
the City Council, and the amount of funds available. It is anticipated that as
a project gets closer to being undertaken, it would be moved to a specific CIP
year during the annual update of the CIP. Nonetheless, any of the projects
listed in the non-programmed category could happen at any year based on
action by the City Council.
It should be noted that most of the street projects are in competition for the
same source of funds. These sources include MSA funds for those projects
that meet its eligibility criteria, the street reserves, and the Capital Projects
reserves. Additionally, the City needs to pay attention to developing its
equipment reserves for some of the major items listed above. Finally, the
City will have to consider public referendum-voter approved bonds for some
of the major buildings listed in this non-programmed category.
It should be noted that some of the non-programmed projects are very long
range in nature and it may be many years before they are financeable and
undertaken.
4~97
CIP FINANCES
MUNICIPAL STATE AID (MSA)
MSA Funds can only be used for street, street lights, drainage, and sidewalk
projects on MSA routes. These funds are usually used in combination with
assessments to benefited properties and/or the use of City Reserve funds.
The annual allocation for the City of Elk River is approximately $500,000 per
year. These funds increase as the MSA mileage in the City increases. The
MSA mileage is based on the total amount of local street miles in the City.
Funding is also subject to changes depending on State Legislative action.
Some improvement projects that have been partially funded with MSA
monies and which have taken place in the last ten years include: Tyler
Street, Proctor Avenue, Filmore Street, Main Street/Highway 169, Main
Street/Orono Road and the bridge replacement, 193rd Avenue/Highway 169
signal, Orono Parkway, School Street/Jackson Avenue along with the signal
at this intersection and 171st Avenue. This fund also indirectly helped pay
for the City's share of Joplin Street, the extension of Orono Parkway and Elk
Hills Drive/Dodge Avenue.
In 1992, the City bonded for some large scale improvement projects (Main
Street/Highway 169, Orono Parkway, 193rd Avenue signal) and committed
future MSA funds from 1994 through 1999 for the repayment of these bonds.
This annual bond payment takes from $165,000 to $185,000 from the MSA
annual allocation. Accordingly, the annual revenues that are actually
available to the City for improvement projects for the next three years are
approximately $325,000.
The balance of the 1997-99 MSA funds that are not committed to the 1992
bond are available for City use. If more funds are needed for street projects
than what are available, then the City can advance encumber monies or use
other City public improvement reserves to make the project work financially.
Additionally, a 1996 law change now allows cities to obtain an interest free
loan from the state aid pool of funds that have not been used by other
municipalities. The City used this new financing tool in 1996 for the 171st
Avenue project. This ~mprovement combined with the bond payment means
that all of the 1997 MSA funds available to the City have been used.
Additionally, some 1998 funds are committed to repaying this state loan.
Financing 1997 MSA projects will require an advance encumber of 1998 MSA
funds, which in turn, may limit projects undertaken in 1998.
Page 1 of 16
4/97
Beyond the eligible and potential projects listed below, it is anticipated that
in 1997, 1998, and 1999, the City will need MSA funds to complete: the 171st
Avenue upgrade project; the 197th signal project; the School Street/Proctor
Avenue intersection and School Street project; the County Road I and
Highway 10 intersection project; the Upland Avenue and Highway 10 signal;
and the Highway 169 pedestrian bridge.
Eligible MSA Projects:
173rd/175th Avenues
Railroad Drive and 3rd Street
Main Street and Highway 10
Waco Street
Liquor Store Road
Waco or Zebulon Street Bridge
County Road 12
Business Center Drive
Tyler Street ROW & construction between 171st Avenue and County
Road 12
1/97 Balance $ 65,000
1997 Allotment + 497,600
State General Fund Repayment (171st) - 332,600
Bond Repayment - 165,000
Balance of 171st Project - 65:000
$ -0-
1/98 Balance
1998 Allotment
State General Fund Repayment (171st)
Bond Repayment
498,000
123,000
175,000
$ 2OO,OOO
1998 Funds Available to Advance Encumber
for 1997 Projects and to use for 1998 projects:
197th/Highway 169 Signal
County Road 1/Highway 10 Intersection
1998 Project: School Street
1998 Project: Upland/Hwy. 10 Signal
$ 200,000
49,000
70,000
225,000
50~000
$ 194,000
Page 2 of 16
4/97
1/99 Balance
1999 Allotment
(last) Bond Repayment
$ 194,000
505,000
185,000
$ 126,000
1999 Funds Available
1999 Projects:
Highway169 Pedestrian Bridge
Business Center Drive and Waco St.
$ 126,000
315,500
55o.__ ooo
$ 739,000
1/2000 Balance
2000 Allotment
2000 Project:
Tyler Street ROW
739,000
510,000
1/2001 Balance
2001 Allotment
2001 Project:
Tyler Street construction
50% will be recaptured into the Capital Project Reserve through
assessments over 10 years
Requires an advance encumber or a state MSA loan to get to a net
balance of zero
This project may require a MSA bond. The maximum is bond 40% of
the annual allotment.
Page 3 of 16
4~97
CIP FINANCES
CAPITAL PROJECTS FUND
This reserve fund was created in order to allow the City to recapture MSA
funds that are spent on a project which was also partially assessed out to the
benefited property owners. About $570,000 (in principal only) is anticipated
to be added to this fund over the next ten years through the assessment
process. Additionally, this fund can also receive some revenue, as designated
by the City Council, when improvement project bonds are defeased. No other
annual revenues are received so the City must be careful in spending these
limited funds. The Capital Projects funds are spent on street improvement
projects, special projects as designated by the City Council, or to supplement
under financed projects.
Possible Projects:
Outdoor Recreation Park Grant
Old Township Roads
173rd/175th Avenues
Tax Forfeited Land Purchases
Dodge Avenue/5th Street
Riverbank Improvement Project
Improvement of the Railroad Trail
Main Street/Highway 10
Waco or Zebulon Bridge
Naples Street
Dredging of Lake Orono
Railroad Drive/3rd Street
Concord Street
County Road 12
Liquor Store Road
3rd Street/Gates Avenue
Approx. 4/97 Balance ( Undesignated Cash)
1997 Revenues: assessments
Sub -total
1997
Planned Expenditures:
*Joplin Street
*Lowell Avenue
* 171st Avenue/Ulysses Street
*Joplin Signal
*Joplin Frontage Road
Ice Arena balance
Lake Orono Rip Rap
Business Center Drive Water
Mississippi Rip Rap
Approx. Balance (Cash)
$43O,0OO
150,000
$580,000
$101,000
47,500
57,000
78,000
81,000
20,000
8,000
20,000
25,000
$437,50O
$142,500
Page 4 of 16
4/97
Other
Possible 1997 Expenditures:
Jarvis Assessments to be held by the City
Country Crossing Outlot Sewer and Water
Assessments to be held by the City
Riverview Drive and Macon Street
contribution
Highland Avenue Sidewalk
Highland Avenue Street Work
Dodge and 5th Street
118,600
0-24,000
55,000
265,000
1998 Project:
Upland Avenue and Highway 10
Intersection (south leg)
1999 Project:
Contribution to Old Core Village Street
Reconstruction
40,000
2000 Project:
CBD Sidewalk Replacement
100,000
'~authorized by the City Council
Page 5 of 16
CIP FINANCES
4~97
LANDFILL FUND
State law allows for a $1.00 per cubic yard surcharge on mixed municipal
solid waste disposed of in the landfill. Some restrictions are placed on the
use of these funds, but the City can, and has, designated approximately $.70
of this surcharge for the three activities noted below. How much money is
generated by the surcharge fluctuates as the activity level at the landfill
fluctuates. The annual revenues designated for the Government Buildings
and Library funds are built into City Hall and Library bond repayment
schedules. The last library bond payment is scheduled for 2006 and the last
City Hall payment is scheduled for 2010. Any accumulated balance in the
Government Buildings fund is being reserved for a City Hall expansion that
is anticipated in approximately seven years. The Street funds are not
committed to specific projects and can be spent at City Council discretion.
For the past few years the City Council has annually used between $25,000
and $40,000 of the Street Reserves to balance the General Fund budget for
the overlays and the seal coating program.
LIBRARY ($.05) ... annual revenue estimate
$ 20,000
GOVERNMENT BUILDINGS ($.45) ...
annual revenue estimate
$180,000
STREETS ($.20)
1/97 Balance (Cash) - Approx.
1997 Revenues
1997 Expenditures:
169 Fencing
Bridge Railing
Naples Street
General Fund Transfer
BALANCE
$ 230,000
$ 80,000
$ 10,000
$ 21,000
$ 20,O00
$ 35:000
$224,000
1998 - 2001 Revenue Estimate of $70,000/yr. -
1998 Pr~ect:
School Street East of CR 1
General Fund
1999 Project:
Old Core Village
General Fund
Page 6 of 16
$280,000
$ 25,000
35,000
$ 37,500
35,000
4/97
2000 Project: Old Core Village $ 75,000
General Fund 35,000
2001 Project: Old Core Village $ 75,000
General Fund 35:000
1998-2001 Total Estimated Expenditures
$ 352,500
Possible. Streets Projects: see the Capital Projects List. NEED TO SAVE
MONEY FOR THE OLD CORE VILLAGE STREET AND SIDEWALK
RECONSTRUCTION PROGRAM.
Page 7 of 16
CIP FINANCES
4~97
CAPITAL OUTLAY (EQUIPMENT AND INFRASTRUCTURE) RESERVES
This fund was originally established by the City Council through the
designation of available General Fund monies and the defeasing of a special
assessment bond. Additional revenues are very limited. Typical use of these
funds is for smaller equipment items.
Streets Department
Utilities Contribution
Parks Department
Trails
Ice Arena
Major Equipment Repair & Maintenance
Elections
Undesignated
$ 46 000
39 200
33 700
19 400
20 000
70 300
5 500
48 000
$282,100
The Council may note that the Audit shows a different amount of money
available in this Capital Outlay Reserve. This is because the above figures
have been adjusted based on funds being previously committed to projects by
the Council, some early 1997 revenues and due to the planned expenditures
as listed in the 1997 budget. Additionally it should be noted that $20,000 of
the Utility Reserve is for mobile computers for police vehicles(S20,000 more is
scheduled from 1997 revenues) and the Election Reserve is for a ballot
counter machine. The Major Equipment Repair and Maintenance category
eases the pressure on the General Fund budget when unexpected major
expenditures and emergencies take place.
Page 8 of 16
4/97
CIP FINANCES
PARK DEDICATION
Funds are generated in this category through the platting and development
process. By State law, monies can be used only for park capital
improvements and not for annual maintenance items. The Park and
Recreation Commission annually reviews how funds in this category are
proposed to be spent. The City Council has final approval over use of these
monies.
This fund has been traditionally used on an annual basis for smaller land
purchases and for smaller capital improvements in neighborhood parks
(approximately $25,000 per year). The City has used the park dedication
money as our local match for State grants and park grants are submitted
almost annually. If the City is successful in receiving these grants, more
park dedication monies may be needed to match the State funds. Most
recently (in 1996), the City used $45,000 from this fund for the local match
requirement of the Shiely land purchase project.
The major expenditure planned for 1997 is the development of recreation
fields on land owned by the City in the southeast part of the community.
Approx. 1/97 Balance (Cash)
less field development
less County Road I trail
less annual P&R expenditures
Balance
$166,000
60,000
25,000
25,O00
$ 56,OOO
Projects proposed for 1998 include the County Road 12 pedestrian trail and
the Lion's Park skating rink improvements.
The current park fee is $600 per residential lot. The commercial fee is $2,000
per acre. There is no fee on plats for industrial property. It is uncertain how
much money will be added to the park dedication fund in 1997, as the City
may choose to accept land for parks or trails in lieu of cash when
development projects are approved. One scheduled revenue is $30,000 from
Phase II of Lafayette Woods subdivision.
Page 9 of 16
4~97
CIP FINANCES
LIQUOR STORE FUND
Since 1987, the Liquor Store Enterprise Fund has contributed about $1.75
million to the General Fund in order to help keep taxes at a low level. This
contribution also helped to pay for the Fire Hall expansion and the
construction of City Hall. Other special projects funded from Liquor Store
monies include the $100,000 for the purchase of Phase II of the Industrial
Park and the $225,000 loan to the HRA for the King and Main
redevelopment project. Approximately $175,000 per year is transferred out
of the Liquor Store Enterprise Fund to the General Fund for City activities.
In January, 1995, the City finalized its purchase of land for the new
Northbound store, and in January, 1997, the City finalized its purchase of
land for a future Westbound Liquor Store. In late 1997, a new $1.45 million
Northbound Liquor Store is scheduled to be completed and opened for
business. This new Northbound Liquor Store is financed with a small
amount of existing Liquor Store Reserves and future revenues.
Approximately $150,000 per year of profits are projected to go toward debt
retirement for the new Liquor Store. If profits are not as high as in previous
years, and this can be expected in 1997 and 1998, then less money will flow
into the General Fund for City activities as the number one requirement of
the Liquor Store Enterprise Fund is debt retirement of the construction
bonds. It is expected that profits will rise in the future and that the
contribution to the General Fund will be roughly the same as in previous
years. If profits exceed projections, funds will be put aside to be saved for the
future Westbound Store. Based on the construction debt for the new store,
there are very limited, if any, liquor funds available for special projects.
Estimated Yearly Profit $300,000
Annual Northbound Bonds 150,000
Annual General Fund/City Hall Contribution 150:000
Year End Balance $ 0
Page 10 of 16
4~97
CIP FINANCES
NSP CONTRIBUTIONS
Beginning in 1991, NSP began contributing funds to the City of Elk River.
The contribution was negotiated between the City and NSP and was offered
by NSP to finance improvements in the City to help offset any negative
effects or opinions which may inadvertently be directed at Elk River due to
the RDF Plant.
The contribution is approximately $200,000 per year. Of this amount,
$20,000 goes directly into the City General Fund to help pay for police
services associated with monitoring RDF related truck traffic on the
highway. Half of the balance, approximately $90,000 per year, is designated
for part of the City Hall/Police Station bond repayment plan. Approximately
$90,000 per year is available for other activities at the discretion of the City
Council.
Of the $90,000/year that remains under the discretion of the City Council,
the 1991-1994 funds were spent on the Oak Knoll recreation fields and the
purchase of the land at the City Hall site. The 1995 and 1996 funds were
used for the purchase of the Cass property. The City may recapture some of
these funds through the selling of residential lots (excess Cass property) and
is scheduled to recapture $60,000 over time from the youth athletic
organizations for the development of the fields. The City will then have this
money available for future activities. The Cass property is to be put into
recreation fields and the 1997 NSP funds are planned to be spent on this
development project. The 1998 NSP funds have not yet been committed.
Ideally, NSP money will be saved in a reserve for a few years for future large
scale projects. Saving this NSP money for a number of years until a larger
pool of funds develops could be a significant benefit to the City in the future.
Page 11 of 16
4/97
CIP FINANCES
SURFACE WATER MANAGEMENT (SWM)
In late 1994, the City Council approved its tax levy for calendar year 1995.
Included in this tax levy were funds for surface water management activities.
This tax levy was continued in 1996 and 1997 and will have to continue for
the long term in order to finance the SWM projects that have been approved
and which are anticipated to be approved in the next few years.
In 1994, the City authorized over $1 million in bonds for surface water
management activities. These activities included work for the Deerfield III,
County Roads 12/13, and Highways 10/169 projects. Additional surface
water management projects approved by the City Council in 1995 include the
Main/Evans project and Western Area Phase II trunk storm drainage pipes.
These projects plus some pre-1994 activities were financed from the City
development fund and are scheduled to be repaid from the annual tax levy.
Anticipated SWM projects for 1997 include the north Joplin frontage road
and minor work on the south end of Ditch 28. Future activities call for
additional County ditch work, Western Area Phase III, and the east Highway
10 area.
The 1997 tax levy is sufficient to pay the 1997 principle and interest on the
SWM bond and to eliminate the $60,000 fund deficit, but leaves very few
funds available for additional 1997 projects. After making the 1998 bond
payment, approximately $50,000 should be available for 1998 projects. This
projection excludes all impact fee collections. The City will have to carefully
analyze the available finances before authorizing work on future SWM
projects.
To generate additional SWM funds, the Council should consider increasing
the required SWM fees on developments. The fee in Elk River is
substantially lower than other suburban developing communities and the
benefited property owners (the developers) are only paying a fraction of the
actual SWM costs that are related to the development project.
Page 12 of 16
4/97
CIP FINANCES
INDUSTRIAL DEVELOPMENT FUND
In recent years the City realized the need to create an economic development
fund to encourage industrial development. In 1996, a development fund was
established. Through contributions into this fund from the annual tax levy
and the Utilities department, over one million dollars will be available by
2001. No revenues are scheduled to be generated after 2001. Accordingly,
the City will have to be careful in spending these funds and will have to look
at establishing a reoccurring annual source of revenues. Also, it is hoped
that the funds spent on economic development activities will be recaptured.
This will most likely be possible unless the Tax Increment Financing law
changes.
The development funds are anticipated to be spent to purchase land and to
make public improvements to the property so that it can be available to
market as industrial sites. The fund can go further if assessment agreements
can be made for public improvements with owners of industrial land.
These funds are under the management of the City Council, but are
anticipated to be spent per recommendation of the Economic Development
Authority in accordance with the Economic Development Strategic Plan.
Page 13 of 16
CIP FINANCES
4~97
GENERAL FUND OPERATING MONIES, LEASE PURCHASE
AGREEMENTS, UTILITIES CONTRIBUTIONS (FOR EQUIPMENT), AND
EQUIPMENT CERTIFICATES
Annual tax and Utilities monies are spent for building payments and on a
number of capital improvement/equipment items. The City averages
approximately $300,000 per year on these types of expenditures. Examples
of these expenditures include the purchase of emergency preparedness sirens,
police vehicles, street/park department equipment and vehicles, office
equipment, and the annual payments for the public works building, fire hall
expansion and the City Hall building.
INSURANCE FUND
This fund was created through the designation of General Fund monies and
through the defeasing of a special assessment bond. This fund is used to pay
for unusual legal expenses for activities not covered by the City insurance
policy and for the loss of non-insured equipment items. Very limited
additional revenues are projected in this fund. Any insurance rebates that
are received flow into this fund. Monies from this fund could be shifted to
any other category or used for any other purpose at the discretion of the City
Council. Approximately $50,000 in revenues are anticipated to be added to
this fund over the next five years. Additionally, another $100,000 is
anticipated to be added to this fund over the next few years based on an
internal loan that was made to the Housing and Redevelopment Authority for
the King and Main project.
1/97 Balance (Cash)
$179,000
Page 14 of 16
4/97
CIP FINANCES
REMAINING FINANCING TOOLS:
CONTRIBUTIONS/DONATIONS
Limited funds are available through this mechanism and the amount of
money is typically for special one-time items. This may be a source of
funding for park or recreation projects.
GRANTS
There are a limited amount of grant programs currently available. Possible
grant applications could relate to park development through the Outdoor
Recreation program or for the riverbank protection from the Sherburne
County Soil and Water Conservation District or street projects from ISTEA
funds.
HRA/EDA
Annual revenues are generated through a tax levy as approved by the City
Council. Either the EDA or HRA may use its funds on improvement projects
such as upgrading the downtown parking lots, or improvement of the
riverbank area. Additionally, either agency may approve a TIF project or
may issue bonds for appropriate projects provided they are also approved by
the City Council.
WATER FUND
This fund is under the jurisdiction of the Municipal Utilities Commission.
Funds are available for water related improvements. The Commission needs
to plan for future wells, water towers, and major expansions of the trunk
utility system.
ELECTRIC UTILITY
This fund is under the jurisdiction of the Municipal Utilities Commission.
The Electric Fund currently donates cash to the City in the amount of
approximately $150,000 annually for General Fund purposes, but about 50
percent of this money is being used for capital equipment needs as noted on
the previous page. Additionally, the electric utility finances all of the ongoing
City street electrical expenses within its territory, free of charge to the City.
It is unlikely, but the electric fund may help finance one-time special projects
as has happened in the past with the Fire Department equipment van.
Page 15 of 16
4~97
CIP FINANCES
IMPACT FEES
Funds are limited and designated for a specific purpose. For example, the
City collects a park dedication fee, which could be considered an impact fee,
on all new plats for future park projects. Additionally, the City collects a seal
coating impact fee from developers to finance the first seal coat needed in a
subdivision. The SWM fee could be considered an impact fee. Impact fees
can also be collected from developers for such off site items as new signals.
Impact fees are obtained when a project has an impact on City programs,
projects, or services.
SPECIAL ASSESSMENTS
A number of street and utility improvements are assessed out to benefited
property owners either in their entirety or as a partial assessment. Projects
can be pursued by a petition of benefited property owners or initiated by the
City Council.
TIF PROJECTS
Monies are only available for special projects subject to State law and City
Council approval. These projects are sometimes initiated by the EDA or
HRA. Each project is reviewed on the individual merits of the proposal.
BOND REFERENDUM
Monies are only available if approved by the citizens through a public vote.
Money is typically used for larger scale items such as a major park land
purchase or park improvement program, or for a community center. The only
recent bond referendum that the City has had relates to the purchase of the
aerial platform ladder truck for the Fire Department.
WASTE WATER TREATMENT PLANT
All WWTP improvements are financed through the WWTP reserves or
WWTP revenue bonds (if they are not assessed out to benefited property
owners). The City has recently undertaken a major plant improvement to
increase the capacity from 1.04 MGD to 1.64 MGD. Twenty year bonds were
issued for this improvement. A small additional expenditure for equipment
in a few years will further increase the capacity to 2.04 MGD.
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