CR 91-242 Capitail Improvements Plan0
October 30, 1991 P K Council Report: 91 -242
Proposed Action.
Staff recommends the City Council conduct the public hearing on the
1992 -1996 C.I.P., continue the public hearing until 11 -19 -91 and
schedule further review of the C.I.P. at the City Council's 11 -12 -91
worksession.
Approval of this motion will allow the review and adoption process to
continue on the Capital Improvements Plan.
Overview.
Since July, City staff has been working on the preparation of the
1992 -1996 Capital Improvements Plan for the City of Hopkins. At this
point, the plan has been reviewed by the City Manager, Finance
Director, and department heads, as well as by the Park Board and the
Planning Commission.
The Capital Improvements Plan is in a revised draft form and
represents the recommendations from the various departments within
the City. Certain maps and other graphics are still being prepared
and will be incorporated as a part of the final adopted plan. Also,
the project numbers are not yet in sequential format or specific
projects may not have been assigned a number. This will be corrected
for the final CIP document.
Although the action requested by the City Council only involves the
holding of the public hearing, the City Council is encouraged to make
comments or ask questions on the plan as a part of the Council's
review on Tuesday night. The Council will also have an opportunity
to fully comment on the proposed plan as a part of the Council
worksession November 12 and during the City Council meeting on
November 19.
Attached is a letter from Gary Schatz commenting on the CIP.
Primary Issues to Consider.
o What is the purpose of a Capital Improvements Plan?
o What are the highlights of the proposed plan?
o What are the financial implications of the proposed plan?
o What is the schedule for adopting the Capital Improvements
Plan?
What comments were made by the Planning Commission and Park
Board?
Supporting Information.
o Staff analysis of issues
o Finance Department analysis
o Alternatives
o R -vised Draft of 1992 -1996 Capital Improvements Plan
o etter from Gary Schatz
Tom Harmening
Community De opm- t Director
Y
1992 -1996 CAPITAL IMPROVEMENTS PLAN
Analysis of Issu s.
CR: 91 -242
Page 2
o What is the purpose of a Capital Improvements Plan?
The Capital Improvements Plan is a five -year forecast of project and
equipment needs in the City of Hopkins. It is intended to alert the
Council and citizens to the major capital needs on the horizon. The
Capital Improvement Plan is intended to be a planning tool and is
structured to present a meaningful, long -range perspective of the
City's capital programming needs. At the same time, sufficient
program details are provided to enable those who review the
information to make informed decisions on the program projects over
the next five years. The first year of the plan presumes an adopted
capital budget. The remaining four years represent an estimate of
project needs and funding capabilities of the City.
In the past, the four years after the first year were
without specific consideration to the ability for the
financially undertake the projects. The proposed
Improvements Plan differs in that the plan was compiled in
such that it is more financially realistic.
o What are the highlights of the proposed plan?
The proposed five -year Capital Improvements Plan outlines projects
totalling $14,291,000 over the 1992 -1996 period. This compares with
total projects amounting to over $22,000,000 in the previous five -
year Capital Improvements Plan (1991 - 1995).
For 1992, $4,456,600 in projects and equipment are proposed. This
compares with $6,975,000 proposed for 1992 in the previous five -year
Capital Improvements Plan.
proposed
City to
Capital
a manner
Major projects within the Capital Improvements Plan for 1992 include:
o ST -5 & ST -6 - Knollwood reconstruction - $851,000
o ST -7 & ST -8 - Reconstruction of Mainstreet between llth
Avenue and Shady Oak Road - $1,725,000
o ST -9 - CBD alley improvement - $500,000
o CF -5 - Purchase and development of
$28o,000
o. MF -11 - Remodeling of the fire station -
o CE -4 - Purchase of a pumper truck - $232
o CE -19 - Purchase of a front -end loader -
Maetzold Field -
$110,000
,500
$80,000
o What are the financial implications of the proposed Capital
Improvements Plan?
Attached is a .memo from John Schedler, Finance Director, which
provides an analysis of the effect on the various funds which will be
used to support the proposed Capital Improvements Plan.
o What is the sch dule for adopting th Capital Improv ments Plan?
November 5 - Public hearing by City Council on proposed
Capital Improvements Plan
CR: 91 -242
Page 3
o November 12 - City. Council review of Capital Improvements
Plan during a work session
o November 19 - Adoption of Capital Improvements Plan by City
Council.
o What were the comments made by the Planning Commission and Park
Board?
Both the Planning Commission and Park Board have reviewed the CIP
document. Questions by both bodies have been addressed by staff. No
specific changes have been recommended.
Alt rnatives.
1. Adopt staff's recommendation regarding the scheduling of
the City Council's review of the CIP.
2. Approve the action as recommended by staff but set
different dates for the Council's review.
3. Table matter for further information or discussion.
Year of
Issue
MUNICIPAL STATE AID
TAX INCREMENT FINANCING
FINANCIAL REVIEW OF FUNDING
Principal
(20 Year Bonds)
FINANCE DEPT. ANALYSIS
Overall this plan is much more attainable in comparison to the
prior year's plan.
CURRENT REVENUES /GENERAL RESERVES
All of the 1992 projects cannot be funded without a reduction in
other areas of the 1992 budget. For 1993 -1996, unless the tax
levy and /or LGA formula is revised to allow the City greater
flexibility, most of these projects cannot be funded from this
source.
G.O. BONDS /SPECIAL ASSESSMENT
Some projects listed in 1992 and 1993 are designated to be funded
.from the 1990 bond issue in the amount of $448,500. Funding for
the remaining projects would require issuing $3,750,000 in bonds.
Interest &
Issuance Cost
Life of Issue
1992 $1,350,000 $1,040,000
1993 1,400,000 1,200,000
1995 1,000,000 850,000
3,750,000 3,090,000
Special Assessment
Repayment 2,800,000 2,200,000
Net Cost to City $ 950,000 $ 890,000
$92,000 average annual tax levy over 20 years - repay
bonds and interest.
The large projects in 1991 and 1992 will cause a two year
moratorium on projects, but the CIP takes this into account and
funding is sufficient as the projects are listed.
Cash on hand and increments above debt service would cover these
projects and private sector assistance.
SANITARY SEWER
After scaling back and rescheduling projects as shown in the
original CIP plus budgeting use of TIF funds for the sanitary
sewers in segment 3 of Mainstreet in 1991, the need for several
significant rate increases is reduced and delayed beyond the
current CIP plan. However this assumes an increase in 1992 rates
to $2.50.
EQUIPMENT REPLACEMENT
The continued issuance of $400,000 debt annually has and is
providing a steady cash flow to maintain the variable cost of
equipment purchases in a given year. Beginning in 1991, the plan
is to shift debt instruments from bonds to internal Certificates
of Indebtedness. The City is then able to continue levying taxes
outside the levy limit, but this change of debt instruments will
avoid issuance costs for legal, bond consultant and rating agency
fees.
STORM SEWER
The heavy construction of sewers in 1990 and 1991 and the low key
projects over the next 5 years continue a negative cash flow.
Just the debt service and the two annual maintenance projects -
systems and alleys - will continue to increase the negative cash
position at the present rate.
WATER
A revision to the original CIP, by which needed projects are
spread over a greater period of time, also reduces the frequency
of projected rate increases. No rate increase is budgeted for
1992, but will require a close analysis in 1993 or 1994.
REFUSE
After several years of struggle, working capital (cash) is in a
healthy position for this fund. Grants have been most helpful.
Cash is available now for the purchase of projected trucks.
Mir . ..Tom Harmening
Community Development Director
City of Hopkins
Dear Tom,
i would appreciate your reading of the attached letter to the council.
Removing Dick's ( is an important step to improving 2nd. St.
NE . , but it further is in bad need of some capital improvements.
(here are no sidewalks for pedestrians on that busy and dangerous
street, the lighting is inadequate, there are no trees, and it does
not tie in at all with Minnetonka mills Road. ..!he steet surface may
be fine, but the street looks like heck.
1 am asking you to put a plan together along with the capital
improvement funds (which will not have to be major to make enormous
improvements in the attractiveness and safety of this badly neglected
c o r r i d o r ) .
certainly it is in the best interests of Hopkins residents to clean
that street up and make it attractive as it would be a tragedy to lose
businesses like Alliant, and further, it could attract some tax paying
businesses if they thought it was a good street on which to build. We
should have a nice building replace Dick's rowing for example!
Please let me stress that I don't see a big expenditure as being
necessary to make the improvements, but if some money is not put aside
now it is the kind of thing that is put off and put off.
..Thank you for your consideration,
5:4;
October 24, 1991
Gary S atz
413 M nroe Place
Hopkins