Memo - Capital Improvement Plan
CITY OF HOPKINS
I FINANCE DEPARTMENT I
MEMORANDUM
Date: June 9, 2005
To: Mayor & City Council
Prom: Christine Harkess, Finance Director
Subject: Capital Improvement Plan (C.LP.)
Attached is the proposed CIP, which has undergone several staff revisions. At the work session
we will review the 2006-2010 document and incorporate any changes from that discussion prior
to holding the public hearing that is scheduled for July 5, 2005.
The CIP consist of four parts -
1. The narrative and cash flow statements
2. Projects summarized in a number of different ways - by year, by department, by funding
source, etc
3. Individual project sheets providing a description of the project, justification, and funding
source.
4. Map showing the projects color coded by year scheduled
SUMMARY OF IMP ACTS ON MAJOR FUNDING SOURCES
CURRENT REVENUES/GENERAL FUND RESERVES
General fund expenditures historically have increased every year with the exception of
2003. Due to significant cuts in Local Government Aid the city took action to limit any
potential tax increases by reducing expenditures and postponing capital expenditures
normally funded from the General Fund. Expenditures for 2005 are budgeted at a 7.8%
increase over the 2004 budget. In the process of determining what funds will be available
from the general fund for capital, the city has postponed the citywide trail connections
and the Co. Rd. 3 boulevard beautification projects out to 2006. The tax levy is the major
source ofrevenues (82%) for the General Fund and therefore would need to increase if
general fund operating and capital expenditures increase in 2006. The legislature is still
debating the future of tax levy limits for 2006 and beyond.
Reserves in the General Fund total $4,071,293 at the end of 2004 and are projected to
remain at that level for 2005. The city requires funds totaling approximately 5 months of
expenditures on hand for cash flow since tax revenue are received twice a year in June
and December. This amounts to $3,720,000.
PERMANENT IMPROVEMENT REVOLVING FUND. (P.LR.) - G.O. DEBT
Funding from bonds is used to reimburse the P.LR. fund for public improvement projects,
which have been previously expended. The debt is funded by special assessment
collections and city tax levies over an eight to ten year period. In 2005, the levy for
permanent improvement revolving debt was $147,000. In 2006, the levy for debt will
again be $147,000. The outstanding debt is from 1992, (refunded in 2001), 1999 and
2002. The P.LR. fund has completed substantial projects over the last three years. With
the current funding issues for the general fund, the city has scaled back its planned future
street improvements to lighten the potential levy increases for debt service in the future.
It is anticipated that the city will not need to issue bonds until 2007. The debt levy for
P.LR. projects will be $147,000 each year until 2008, when it may increase for the bonds
that may need to be issued in 2007. The P.LR. fund will maintain a stable fund balance
into the near future.
MUNICIPAL STATE AID FUND
Funding is insufficient for the projects listed in the CIP document in 2006 and beyond
unless anticipated project costs are delayed or the city borrows funds from the state.
Excelsior Boulevard streetscape improvements totaling $1,380,000 are scheduled for
2006 and the County Road 3 project is a substantial project that is being conducted
jointly with Hennepin County scheduled for the 2009 construction season. In order to
fund these projects the city will be requesting an advance on future allotments from the
state to cover these projects costs. The advance is similar to borrowing from the state at
market or below current interest rates. It is projected that the city will need to borrow
approximately $1,000,000 from the state in 2006 and another $1,000,000 in 2009. Debt
payments for these borrowings will come out of future dollars allotted to the city.
CAPITAL IMPROVEMENT FUND
Funding for this fund in the future is dependent on future infrastructure improvement and
maintenance needs. Past funding has been transfers from the general fund. A $25,000
levy for capital improvements was established for 2005 with annual increases planned for
future years. To supplement the tax levy future transfers are also budgeted from the
general fund to adequately provide for scheduled projects. Significant improvements
scheduled in 2006-07 include city hall interior and exterior improvements.
PARK IMPROVEMENT FUND
The source of funding for this fund is development fees charged to developers for park
development. Future funds are very dependent on future development and
redevelopment in the city. The County Road 3 beautification project has been pushed out
to 2007 when funds will more likely be available for this type of project. Projects
scheduled for 2007 are in Valley Park and include a parking addition at $40,000 and
upgrades to the hockey rinks at $45,000.
WATER FUND
Several large facility upgrades completed between 1999 and 2001 require rate increases
in the future to help pay for bonds issued. In addition, the public works facility
improvement project will cost the water enterprise $45,000 a year for twenty years.
Increased operating costs and improvements to water facilities prompted a $.20 cent per
1,000 gallon rate increase that was approved for 2005. The next anticipated rate increase
would most likely be in 2010. The increases in the rate are necessary for operations, to
maintain the planned projects and to payoff bonds that were issued to provide funding
for water improvement projects.
SANITARY SEWER FUND
The current revenues and working capital balance will cover the projected operating and
capital costs through 2007. In 2007, lift station #1 will need to be replaced. This station
has been operating since 1957. In addition to the new lift station, the Metropolitan Waste
Control Commission is projecting increases in its disposal charges to local governments.
Also, the public works facility improvement project will cost the sewer enterprise
$50,000 a year for twenty years. These events will prompt the city to increase its current
rates to cover costs and keep a healthy working capital balance. Analysis of projected
capital projects and the projected operating costs may necessitate a rate increase in 2006
from $2.25 per 1,000 gallons to $2.50 per 1,000 gallons. Looking further into the future
the city may need to increase rates every two to three years to keep pace with disposal
costs and infrastructure needs. In addition, it is anticipated that we will need to bond in
2008 to fund all scheduled projects.
REFUSE FUND
A rate increase was approved for 2005 and was the first rate increase since 1995. Absent
a new fee for brush, yard waste and leaf collection, refuse disposal rates will need to
increase every four years to offset costs and recycling rates will need to increase every
four years to offset recycling costs. The public works facility improvement project will
cost the refuse enterprise $25,000 a year for twenty years.
STORM SEWER FUND
The storm sewer utility issued bonds in 2003 to help cover infrastructure costs that were
incurred prior to 2003. The city anticipates the continued pace of construction through
2007 which require additional bonding in 2008 to maintain sufficient cash flow. A
significant proj ect scheduled for 2007 is the 5th Street South culvert replacement at an
estimated cost of $520,000. The public works facility improvement project will cost the
storm sewer enterprise $25,000 a year for twenty years. The storm sewer utility rate will
need to increase to cover the costs of outstanding bonds and future operating and
construction costs. The proposed rate increase will most likely take effect in 2006. The
proposed rate increase is 12.5% over the current rates.
TAX INCREMENT FINANCING FUNDS
Considering all tax increment districts, as a whole, cash on hand, proj ected increments
and loan repayments are sufficient to cover TIP project expenditures. The state has
provided municipalities with a pooling tool to accommodate short-term deficiencies
within its' districts. The city will be allowed to pool its' districts tax increment revenues
to cover outstanding debt. Currently none of the city's districts are projected to have
shortfalls.
2009
BUDGET
2008
BUDGET
2007
BUDGET
2006
BUDGET
APPROVED
2005
BUDGET
2004
ACTUAL
2004
BUDGET
Fund Budget Projections
General
7,850,000
387,000
515,000
123,000
$
262,000
10,000
290,000
9,437,000
7,750,664
386,010
500,000
120,000
255,440
7,350
290,000
9,309,464
$
7,382,147
386,010
536,975
115,000
243,276
7,350
290,000
8,960,758
$
7,300,000
386,010
621,975
11 0,000
231,691
7,350
290,000
8,947,026
$
7,273,078
379,510
627,975
11 0,000
$
6,372,726
743,812
687,655
48,915
$
219,350
21,851
290,000
8,921,764
297,895
35,597
242,431
8,429,031
6,666,136
386,010
623,575
100,000
216,150
16,750
265,000
8,273,621
$
SOURCE
Current Revenues
Property Tax
Intergovernmental Revenues
License, Permits and Fines
Investment Earnings
for Current Services
Charges
Other Revenue
Franchise Fee
Total
7,492,000
2,900,000
350,000
75,000
10,817,000
7,344,445
2,876,781
383,339
75,000
10,679,565
7,072,278
2,848,298
348,490
50,000
10,319,066
6,814,079
2,820,097
322,676
100,000
10,056,852
6,416,183
3,152,283
127,600
6,291,222
2,807,137
74,006
6,267,336
3,009,233
40,000
Revenues
Current Expenses
Salaries and Employee Benefits
Materials, Supplies and Services
Capital Outlay
Capital Improvements (ClF trsti-)
Total
(1,405,000)
9,412,000
25,000
9,437,000
(1,393,101)
9,286,464
23,000
9,309,464
(1,379,308)
8,939,758
21,000
8,960,758
4,308,118
$
4,308,118
$
4,308,118
$
(1,365,651)
8,691,201
19,000
8,710,201
236,825
4,308,118
9,696,066
9,172,365
9,316,569
Less Expenditues Charged to
Other Activities
(1,341,302)
8,354,764
567,000
8,921.764
{1,321,364)
7,851,001
294,648
8,145.649
{1,337,596)
7,978,973
294,648
8,273.621
Net Total
Other Financing Uses
Total Expenditures
$
4,071,293
$
283,382
4,071,293
$
4,084,780
$
Change in Fund Balance
Fund Balance
MUNICIPAL STATE AID FUND
2010
2009
2008
2007
2006
2005
2004
2003
327,752
408,000
13,110
568,031
408,000
22,721
1,000,000
560,416
408,000
19,615
292,189
408,000
10,227
351,874
408,000
12,316
1,000,000
2,373,453
345,350
83,071
2,830,665
308,662
52,771
o
2,565,484
764,138
7,746
Working Capital Beginning Bal
Annual Allotment
Interest Earnings
Bond issue
o
300,000
1,421,000
250,000
270,000
150,000
o
150,000
1,380,000
100,000
2,370,000
80,000
o
818,645
506,703
Transfer Out for Projects
ClP State Aid Projects
Debt service expense
448,862
327,752
568,031
560,416
292,189
351,874
2,373,453
2,830,665
Working Capital Ending Balance
501
P.I.R. FUND
2010
2009
2008
2007
2006
2005
2004
2003
1,507,934
243,338
1,203,437
623,822
1,090,861
1,534,377
1.163,199
1.144,287
Working Capital Beginning Year
520,000
60,317
o
580,317
2,225,000
2,754,734
o
582,120
1,000,000
1,571,834
87,900
Special Assessment Revenues
Refunds & Reimbursements
Interest
Transfers In
Miscellaneous
Bond Proceeds
Total
520,000
9,734
540,000
42,120
550,000
21,834
550,000
38,180
590,000
53,703
775,884
29,399
769,465
21,206
2,050,000
291,438
2,341,438
1,248,700
241,438
1,490,138
1,282,000
260,219
1,542,219
782,000
210,219
992,219
588,180
845,000
210,219
1,055,219
643,703
877 ,000
210,219
1,087,219
805,283
220,886
213,219
434,105
878,571
641,440
218,219
859,659
Sources
C.1.P. Projects
Debt Service Transfers
Total Uses
(253,187)
1,507,934
243,338
1,203,437
623,822
1,090,861
1,534,377
1.163,199
Working Capital Year End
CAPITAL IMPROVEMENTS FUND
2010
457,010
22,851
75,000
100,000
197,851
13,429
75,000
100,000
188,429
5,647
75,000
75,000
155,647
4,734
50,000
75,000
129,734
2,278
100,000
50,000
152,278
2,534
o
25,000
27,534
150,000
150,000
o
o
o
o
122,000
122,000
161,000
161,000
167,000
167,000
1,000
6,584
6,584
504,861
457,010
268,581
112,934
105,200
113,922
253,388
PARK CAPITAL IMPROVEMENTS FUND
2010
2009
2008
2007
2006
2005
2004
32,695
817
3,500
4,317
50,000
37,013
2009
268,581
o
1,000
o
28,483
712
3,500
4,212
32,695
2008
112,934
24,374
609
3,500
4,109
28,483
2007
105,200
20,365
509
3,500
4,009
40;000
24,374
2006
113 ,922
75,966
1,899
25,000
2,500
-
29,399
85,000
85,000
20,365
2005
253,388
85,889
2,577
35,000
2,500
-
40,077
50,000
50,000
75,966
2004
258,972
111,490
1,994
39,600
4,100
-
45,694
71,295
o
71,295
85,889
2003
Working Capital Beginning Year 107,972
Charges for services
Interest 1,000
Transfers In form General Fund 150,000
Levy
Total Sources 151,000
c.I.P. Projects
Total Uses 0
Working Capital Year End 258,972
2003
Working Capital Beginning Year 199,122
Interest 3,145
Dedication fees 20,500
Donations 8,885
Total Sources 32,530
c.I.P. Projects 120,162
Ice Arena
Total Uses 120,162
Working Capital Year End III ,490
WORKING CAPITAL PROJECTION
WATER FUND
2010
2009
2008
2007
2006
2005
2004
2003
559,772
1,350,842
o
25,190
528,224
1.150,842
o
23,770
506,512
1.128,276
o
22,793
523,291
1.106,153
o
23,548
481,515
1,084,464
o
21,668
659,363
,063,200
39,000
29,000
1.102,734
813,243
22,756
8,018
o
,376,032
o
1.174,612
o
1.151,069
o
1.129,701
o
1.1 06, 132
o
131,200
o
844,017
923,617
911,397
31,399
24,594
300,000
o
1,267,390
Working Capital Beginning Year
Operating Revenues
Other
Interest
Transfer In
Bond Issuance
Total Sources
814,971
49,638
795,094
56,870
775,702
63,655
756,782
69,999
738,324
76,032
720,316
81,732
733,729
85,008
764,315
84,078
22,200
75,000
145,000
45,000
1.151,809
31,100
75,000
140,000
45,000
1.143,064
0,000
105,000
130,000
45,000
1.129,357
44,700
105,000
125,000
45,000
1.146,481
10,000
75,000
120,000
45,000
1,064,356
50,000
297,000
115,000
45,000
1,309,048
24,394
289,006
110,000
45,000
1,287,137
o
136,832
105,000
o
1,090,225
Operation Expense
Other Expense
Transfer Out
Capital Outlay
Capitallmprovements
Principal Bond payment
Capital Lease
Total Uses
21,713
224,222
31,548
(16,780)
41,776
(177,848)
(443,120)
177,165
Change in available funds
(251)
1,952
Inventory change
783,995
559,772
528,224
506,512
523,291
481,515
659,363
1,102,734
Working Capital Ending Year
Rate Historv
1984 $0.85
783,995
$
Balance 12/31/2010
1993 $1.05
1997 $1.10
2000 $1.20
2005 $1.40
2010 $1.60
2015 $1.80
WO~GCAPITALPROmCTION
SEWER FUND
2010
2009
2008
2007
2006
2005
2004
2003
756,853
1,633,000
o
34,058
955,095
1,633,000
o
82,091
1,633,000
o
3,694
481,090
1,533,000
o
647,780
1,533,000
o
654,635
1,433,000
o
1,064,939
1,253,771
o
749,588
1,324,254
o
Working Capital Beginning Year
Operating Revenues
Other
Interest
o
1,667,058
42,979
o
o
-
1,675,979
1,000,000
2,636,694
21,649
o
1,554,649
29,150
o
-
1,562,150
29,000
o
1,462,000
26,228
o
o
1,279,999
26,559
400,000
o
Transfer In
Bond Issuance
Total Sources
1,649,149
28,500
1,632,821
30,000
1,608,691
1,577,148
1,553,840
1,333,855
1,314,143
1,750,813
1,366,115
Operation Expense
Other Expense (interest on bonds)
Transfer Out
10,000
75,000
50,000
50,000
1,862,649
36,400
75,000
50,000
50,000
1,874,221
10,000
95,000
o
51,500
275,000
50,000
75,000
10,000
75,000
o
327,497
o
68,510
50,000
1,763,691
50,000
1,953,648
50,000
1,728,840
50,000
1,468,855
50,000
1,691,640
o
1,434,625
Capital Outlay
Capital Improvements
Principal Bond payment
Capital Lease
Total
Uses
(195,591)
(198,242)
873,004
(398,999)
(166,690)
(6,855)
(411,641)
316,188
Change in available funds
1,337
(837)
Inventory change
561,263
756,853
955,095
82,091
481,090
647,780
654,635
1,064,939
Working Capital Ending Year
Rate Historv
1983 $1.50
561,263
$
Balance 12/31/2010
increase
increase
increase
1989 $1.75
1991 $2.00
1993 $2.50
1999 $2.25
2006 $2.50 rate
2008 $2.75 rate
2011 $3.00 rate
WORKING CAPITAL PROJECTION
REFUSE FUND
2010
2009
2008
2007
2006
2005
2004
2003
383,427
794,600
20,500
17,254
832,354
433,097
794,600
21,000
19,489
835,089
383,677
744,600
21,500
17,265
320,648
744,600
22,000
14,429
781
291,357
696,600
22,500
13,111
732,211
252,065
696,600
23,000
15,000
734,600
521,482
12,734
627,485
591,860
22,891
597,791
515,930
23,394
13,378
552,702
Working Capital Beginning Year
Operating Revenues
Grants
Interest
701,923
688,159
783,365
681,346
,029
674,600
667,921
661,308
654,760
621,343
Total Sources
10,000
25,000
736,923
171,600
25,000
884,759
27,600
25,000
733,946
18,400
25,000
718,000
10,000
25,000
702,921
9,000
25,000
695,308
215,132
25,000
894,892
7,286
o
Operation Expense
Transfer Out
Capital Outlay
Capital Lease
Total Uses
628,629
95,432
(49,670)
49,420
63,029
29,290
39,292
(267,407)
(75,927)
Change in available funds
(2,010)
(382)
Inventory change
478,858
383,427
433,097
383,677
478,858
$
320,648
291,357
Balance 12/31/2010
252,065
521,482
Working Capital Ending Year
refuse
refuse
Rate History
1989 $15.10
1991 $17.25
1995 $11.00-14.45 refuse
$2.25 recycling fee
2002 $2.75 recycle fee
2005 $12.50, 14.60, 15.90,
2007 $3.25 recycling fee
2009 $13.85, 16.05, 17.50,
2011 $3.75 recycling fee
STORM SEWER FUND - WORKING CAPITAL PROJECTION
2010
2009
2008
2007
2006
2005
2004
2003
758,627
880,000
5,000
34,138
1,006,704
880,000
5,000
45,302
160,792
780,000
5,000
7,236
683,930
780,000
5,000
30,777
o
702,765
780,000
5,000
31,624
935,339
680,000
43,054
21,000
1,062,480
674,553
43,137
24,140
(145,471)
628,971
37,553
23,844
o
Working Capital Beginning Year
Operating Revenues
Other
Interest
1,000,000
1,792,236
1,265,000
1,955,368
Transfer In
Bond Issuance
Total Sources
919,138
207,540
77,319
28,500
o
o
930,302
202,478
91,901
30,000
o
198,507
105,816
815,777
194,615
118,900
816,624
190,799
130,660
744,054
187,058
134,570
741,830
11 0,094
141,647
130,682
113,178
(interest on bonds)
(int on 2008 bonds)
Operation Expense
Other Expense
Other Expense
Transfer Out
100,000
105,000
225,000
55,000
50,000
25,000
873,359
o
414,000
100,000
215,000
50,000
50,000
25,000
1,178,379
o
o
252,000
100,000
215,000
50,000
o
8,400
642,000
95,000
205,000
50,000
o
o
159,00~
90,000
195,000
45,000
o
o
o
o
o
253,557
305,000
85,000
195,000
45,000
25,000
946,323
25,000
1,338,915
25,000
835,459
25,000
976,628
25,000
868,971
o
747,417
Capital Outlay
Capital Improvements
1999 Principal Bond payment
2001 Principal Bond payment
2003 Principal Bond payment
2008 Principal Bond payment
Capital Lease
. Total Uses
262,230
80,000
190,000
60,000
80,000
170,000
45,780
(248,077)
845,912
(523,138)
(18,835)
(232,574)
(127,141)
1,207,951
Change in available funds
804,407
758,627
1,006,704
160,792
804,407
$
683,930
Balance 12/31/2010
702,765
935,339
1,062,480
Working Capital Ending Year
Rate Histo er month
1989 $4.75 per quarter
1991 $6.00 per quarter
1992 $2.50
1993 $3.00
1998 $3.20
1999 $4.00
2006 $4.50
2009 $5.00