CR 05-110 Equipment Replacement Plan
July 27, 2005
Council Report 2005-110
2006-2010 EQUIPMENT REPLACEMENT PLAN
Proposed Action
Staff recommends adoption of the following motion: Move to adopt the 2006-2010 Equipment Replacement
Plan.
Overview
The equipment replacement plan is a detailed summary of the next five years of a twenty-year replacement
schedule, for most equipment ofthe City,ofHopkins. General and Special Revenue fund equipment items
are placed in the Equipment Replacement Fund budget which derives its revenues from service charges to the
General and Special Revenue funds, equipment sales and interest earnings. The Enterprise fund equipment
in the plan is placed in the individual enterprise fund budgets, in the year in which the equipment is to be
purchased.
Staff is recommending adoption of the plan.
Primary Issues to Consider
. Should the annual service charges to the general and special revenue funds be adjusted?
. What changes have occurred in the equipment replacement plan since last year?
Supportinl! Information
. Power point presentation
. 2006-2010 Equipment Replacement Plan
~~-~
Christine M. Harkess
Finance Director
EQUIPMENT
REPLACEMENT PLAN
City of Hopkins 2006 - 2010
ERP Future
. Revenues in the Equipment Replacement
fund are derived from charges to city
departments that use the equipment.
. Cash flow projections are updated annually
to ensure adequate funds for scheduled
replacements.
City Hall Equipment
. The large city hall copy machine is
leased on a 5-year lease.
. The small copier is scheduled for
replacement at an estimated cost of
$23,200.
. A large document scanner is
scheduled for replacement.
EQUIPMENT REPLACEMENT PLAN
ERP Background
. The city has established an equipment
replacement plan that is reviewed and
adjusted on an annual basis.
. For 2006 the city is planning on
replacing or upgrading ten vehicles or
large pieces of equipment.
. Following are some highlights of the
plan.
City Hall Equipment
. Annually the city replaces a portion of its
obsolete computers with newer
technology.
. $30,000 per year is allocated to replace
old computers and $8,000 per year is
allocated for network software upgrades.
. Upgrades to the finance and utility billing
software are scheduled for 2006.
Fire Equipment
. The fire department annually assess its
fleet and adjusts the useful lives of the
equipment accordingly.
. In 2006 scheduled replacements include
the admin vehicle and emergency
preparedness sirens.
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Police Equipment
Public Works Equipment
. In 2006 the police department will
replace an admin vehicle, one squad
car and the parking enforcement
vehicle.
. Also scheduled for replacement is
the copier and a network server.
. Public works will replace a 4x2 1-ton
dump truck. This vehicle is used for light
hauling, snow removal and transportation.
. A riding mower used by the parks
department is scheduled for replacement
at an estimated cost of $16,000.
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Public Works Equipment
Activity Center
. A % ton utility truck used by the water &
sewer departments on job sites and for
light hauling will be replaced.
. All public works equipment is reviewed
annually and useful lives adjusted while
maintaining the integrity, reliability and
safety of the equipment and employees.
. A commercial grade refrigerator/freezer
used for programs is original equipment
from 1980 and was acquired used. The
unit continues to have problems and
needs to be replaced.
Utility Funds
Funding Equipment Replacement
. The water, sewer, storm sewer and refuse
utility funds will replace the utility billing
software with software that is fully
compatible with the finance software. This
will allow all finance related systems to be
fully integrated and allow us to enhance
customer service.
. The cost of equipment is allocated back to
the user departments based on life
expectancy of the equipment and cost.
. To rebuild the fund following cuts in 2003
& 2004 due to reductions in LGA
incremental increases in charges to user
departments are budgeted for the next
several years.
EQUIPMENT REPLACEMENT PLAN
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Revenue, Capital and Cash
Variances ('"THOUSANDS,
Conclusion
20012002200320042005 200B 2007
. The Equipment Replacement Plan is a
valuable tool used to assess, plan and fund
future equipment needs of the City.
. By annually evaluating equipment and
adjusting useful lives where practical, the
city has been able to maintain the reserves
in this fund to cover equipment replacement
costs without the necessity of issuing capital
notes or debt.
$2,000
$1,600
$8"
$1,200
$4"
"
EQUIPMENT REPLACEMENT PLAN
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