CR 06-085 2007-2011 Equipment Replacement Plan
July 13, 2006
Council Report 2006-085
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2007-2011 EQUIPMENT REPLACEMENT PLAN
Proposed Action
Staff recommends adoption of the following motion: Move to adopt the 2007-2011 Equillment 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 of the City of Hopkins. 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?
Supportin!! Information
Power point presentation
2007-2011 Equipment Replacement Plan
~-~
Christine M. Harkess, CPA, CGFM
Finance Director
EQUIPMENT
REPLACEMENT PLAN
City of Hopkins 2007 - 2011'
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 at $10,000
per year.
. Engineering printer/scanner is leased
on a 5-year lease at $8,640 per year.
EQUIPMENT REPLACEMENT PLAN
ERP Background
. The city has established an equipment
replacement plan that is reviewed and
adjusted on an annual basis.
. For 2007 the city is planning on
replacing or upgrading six 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 $16,500 per year is
allocated for network software upgrades.
. $15,000 in planned upgrades to network
wiring in the 2nd floor departments.
Fire Equipment
. The fire department annually assess its
fleet and adjusts the useful lives of the
equipment accordingly.
. In 2007 scheduled replacements include a
thermal imaging camera.
1
.
Police Equipment
Public Works Equipment
. In 2007 the police department will
replace an admin vehicle and three
squad cars.
. Also scheduled for replacement are
the mobile data computers in each
squad car.
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. Public works will replace a log truck that is used
for hauling brush and logs in the forestry and
refuse departments. The cost will be shared
50/50 with the ERP and Refuse funds.
. A ~ ton truck used by the Water Division will be
replaced at a cost of $20,500.
The vehicle will be paid with
funds from the Water fund.
Public Works Equipment
Funding Equipment Replacement
.
. A % ton Utility Truck used by the Water and
Sewer Division will be replaced at a cost of
$26,000. This vehicle will be paid with funds
from the Sewer fund.
. All public works equipment is reviewed
annually and useful lives adjusted while
maintaining the integrity, reliability and safety
of the equipment and employees.
. 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.
Revenue, Capital and Cash
Va ri a n ces (IN THOUSANDS)
Conclusion
$1,021
. 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.
$2,042
$0
2001 2002 2003 2004 2005 2006 2007
.
EQUIPMENT REPLACEMENT PLAN
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