9.2. SR 06-02-2008REQUEST FOR ACTION
____
To
Item Number
City Council 9.2.
Agenda Section Meeting Date Prepared 6y
Worl~ ession June 2, 2005 Lori Johnson, Cit ~ Administrator
Item Description Reviewed by
Consider Park Improvement Funding Policy
Reviewed by
Action Requested
Consider park improvement funding policy.
Background/Discussion
One of the action items identified by the Council during the planning worksessions this winter was to
develop a park capital funding plan. In the past the City has relied on park dedication fiwds to purchase
land and to develop parks. For many vears when development activity was high, the City received a
substantial amount of parl. dedication fee revenue each year that allowed the City to acquire land and do
major park itnproveme.nts. Those park dedication funds have now been spent and because development
activity is down substantially, park dedication fee revenue is also down substantially. Tlds leaves little
funding for expansion or btdld out of the park system and for maintaining the capital imrestment already
made. For example, some of the park equipment and trails ate at a point where they need to be replaced
ox need major maintenance. The goal is to make sure there is a replacement program developed with a
funding mechanism in place so that as equupment and trails age they can be replaced and maintained to
preseroc the Cup's initial investment in parks and trails.
Attached is a proposed park improvement funding policy that sets aside funds fioxn the liquor store
profits fox certain park expenditures. The policy gives the Council flexibility to annually determine the
amount that will be n ansfcrrcd from the liquor ftmd to the park improvement fund. illthough the
Connell may choose to consistently dedicate up to 20`% of the nctincome from the liquor fund to the
park iuzprovemenY fund, the policy does give the Council the option to reduce that down to zero each
pear without changing the policy. All of that information is outlined in more detail in Finance Director
Tim Simon's attached memo along with the actual amount of a transfer of 20 percent for this year and
projections for the next few vears.
Financial Impact
Transfer of up to 20% of net income from municipal liquor operations to the park unprovcment fund.
Attachments
' '_Vlemo from Finance Director Tim Simon
J:ACound~ALooA2008\pack mpxovcmrn[fundin0 Poli<y.doc
ACt1o I1 LbLonon by Second Uv Pote ,_
Follow Up
SVCouncil \LouA200fi\pack improrc.ncci funding policy.mc
Item # 9.2.
MEMORANDUM
TO: Mayor and City Council
FROM: Tim Simon, Finance Director
DATE: June 2, 2008
SUBJECT: Parl< Improvement Funding
1A4any dues use a varieh' of ways to fund park improvements such as tax levies, pear-end
transfers, general fund operations-, and liquor store profits. In looping at a variety of options,
I would recommend that d~re Ciry~ uses a percentage of liquor store profits as detexrnined on
a yearly basis for park improvements. The finance department maintains afive-year cash
flow forecast on the liquor stores and feels this will 6e manageable given the percentage
ttansFerxe~d will be reviewed on a yearly basis. See example policy below:
Funding For Parlc Improvements
The Cit~° of Till-. River map utilize up to 20% of net income from its municipal liduox stores
to fund a park improvement fund (PIF). The park improvement ftmd will be used for
further build-out of our current pvl~s, replacement, maintenance of capital assets, and the
beautification of city parks.
The municipal liquor fund cash flow will be reviewed at least annually and prior to the
transfer to insure the Liquor fund has retained enough profits as working capital fox the
operating and non-operating expenditures including personnel costs-, maintenance, debt
service payments and expansion of physical assets, including store facilities. In addition,
budgeted uansfets and capital ixstprovements which urilize liquor proilts- will be made prior
to the park improvement fund transfer.
The amount will be calculated after the prior years audit is complete and will be subsequently
transferred via resohitiou from the City Council- The fund will not incur any debt not spend
in excess of the cash available since the transfer will be calculated yearly in f time.
Example Calculation:
Operating Income (loss)
Less transfers
General Fund
Debt Service (1997 building)
Total
Actual Estimate Estimate Estimate
2D08 2009 2010 2011
Estimate
793,428 727,974 742,278 756,D11 769,663
(219,900) (226,000) (248,600) (273,460) (300,8D6)
(38,300) (38,300} (38.300) (38,300) -
535,228 463,674 455,378 444,251 468,857
percentage transfer to PIF 2D% 107,046 92,735 91,076 88,850
Bill Maextz has prepared an estimated five-pear capital improvement plan fox the park
unpxovement fund if the fund were to be established in 2008. See attached.
S:1Council\Tim120081Parkimprovementfunding.doc
93,771
Syr. Draft Park Improvement Program
Est. Cost 2008 Est. Cost 2009 Est. Cost 2010 Est. Cost 2011 Est. Cost 2012
L',lectxical Upgrades
Rivers F,dge
$5,000
Trail Repairs &
$40,000
Trail Repairs c~c
$40,000 Hockey Rink &
Lights
$40,000
Court Resurface
$10,000
Commons Connections Connections Trottbook Park
Playground Safety
$10,000 Woodland
Trails; Trail
v
G
$40,000 Replace
Playground
$40,000
Court
Resurfacin
$10,000
Bleachers for
YAC/Football
$10,000
xoon
ng, Deerfield Hills g
Garage
Replace Worn
000
$10 Playground
000
$5 Playground
$5,000
Trail Repairs
$Z{>>000 TraIl Repairs &
$40,000
Benches & Tables , Safety ' Safety Connections
Re-Roof
Park lledication
$82
000* Playground $5,000 Shelters Orono $115,000
Reserve , Safe
~
Softball
Re-Lamp Orono $15,000
Softball
*Reserve is for
matching potential
trail giant
S:1CouncillTim1200815yr Draft PIF