2014.07.01 Work Session Packet4141 Douglas Drive North • Crystal, Minnesota 55422-1696
Tel: (763) 531-1000 • Fax: (763) 531-1188 • www.crystalmn.gov
AL
CRYSTAL CITY COUNCIL
WORK SESSION AGENDA
Tuesday, July 1, 2014
6:30 p.m.
Conference Room A
Posted: June 27, 2014
Pursuant to due call and notice given in the manner prescribed by Section 3.01 of the City
Charter, the work session of the Crystal City Council was held at p.m. on Tuesday, July
1, 2014 in Conference Room A located at 4141 Douglas Drive, Crystal, Minnesota.
I. Attendance
Council members Staff
Adams
Norris
Budziszewski Therres
Deshler Larson
Hoffmann Hansen
Libby Peters
Peak Revering
Selton Norton
II. Agenda
The purpose of the work session is to discuss the following agenda items:
• Funding major apparatus purchases/major apparatus fund balance policy for West
Metro Fire -Rescue District
• Update on public works facility project costs
• Financing mill and overlay projects
• 2015 budget assumptions
• Replenishing Major Building Replacement Fund
• Confirm financing Crystal's portion of the emergency water supply
III. Adjournment
The work session adjourned at p.m.
Auxiliary aids are available upon request to individuals with disabilities by calling the City Clerk at (763)
531-1145 at least 96 hours in advance. TTY users may call Minnesota Relay at 711 or 1-800-627-3529.
Memorandum
CITY of
CRYSTAL
DATE: June 26, 2014
TO: Mayor and City Council cc
FROM: Anne Norris City Manager ave
SUBJECT: Continued Discussion of WMFD Funding Major Apparatus
West Metro Fire -Rescue District (WMFD) Chief Larson will be present at the July 1 work
session to continue discussion regarding funding WMFD major apparatus.
In May the Council discussed funding major apparatus for WMFD. During that
discussion, the Council requested additional information regarding the major apparatus
needs for WMFD into the future. Attached is a June 16 memo regarding major
apparatus replacement costs and timing.
Currently, WMFD has separate funds for general operations, pension, capital
equipment, and major apparatus. The general operations fund is the District's annual
operations budget. The Capital Equipment fund was established to fund equipment and
10 staff vehicles purchases. The Major Apparatus fund was established to fund the
purchase/replacement of 4 engines, 1 aerial truck and 4 rescue vehicles.
The District has a fund balance policy (attached) which has been revised over the
years. The current fund balance policy provides that the District will strive to maintain a
general fund balance equal to 10% of the annual general fund budget. The fund
balance policy has been revised to reduce the amount needed for the general fund
balance as both cities are invoiced and pay their contributions on a monthly basis, so
there is sufficient cash flow for most District expenses.
The Major Apparatus fund was established to fund future replacement of major vehicles
(engines, aerial and rescues). However, during a work session of the District Board and
both city councils some years ago, it was agreed both cities would fund their respective
portions of the costs of replacement of major equipment rather than having the District
save for these purchases.
Over the last 18 months, Chief Larson has worked on a stable capital equipment plan
over the next 11 years so that the cities' contributions are predictable with modest,
planned increases and equipment is replaced or purchased on a scheduled basis.
Attached is the WMFD 2014 — 2025 Capital Plan.
In the last 12 months, 1 of the 4 rescue vehicles has been replaced with a smaller, less
expensive vehicle, utilizing funds in the Major Apparatus Fund. The cost of this vehicle
was approximately $90,000. An additional 2 rescues will be purchased late in 2014 at
an estimated cost of $190,000. After these purchases, there will be a balance of
approximately $100,000 in the District's major apparatus fund.
The WMFD Board requested both city councils review funding of major apparatus
(whether each city will continue to plan for its share of the costs or whether the District
should be saving for long-term major apparatus purchases.) The New Hope City
Council discussed this at a recent work session and is supportive of merging the WMFD
major apparatus fund with the capital fund to keep the cities' contributions lower and
relying on each city to fund its share of the costs of major apparatus replacement.
Attached are the current WMFD Fund Balance Policy and the memo from Matt Mayer
with Proposed Policy Revisions.
WEST METRO FIRE -RESCUE DISTRICT
FUNDING FOR MAJOR APPARATUS REPLACEMENT
June 16, 2014 — New Hope City Council Meeting
Refurbishment —
NFPA recommends re-furb or reassignment to secondary response status of major apparatus at 10 years of service. Based on the
amount of miles/hours that our apparatus operate, we have received recommendation from the manufacturer that these vehicles will
not need to be re-furbed or reassigned until replacement.
However, we recommend an increase of $20,000 to the vehicle maintenance budget annually, beginning in 2017 to address pump and
discharge "wear item" replacement needs.
Purchase —
Apparatus prices have been increasing at a rate of 2 - 5% per year. For budgeting purposes we would recommend planning based upon
the 5% figure to ensure adequate funding.
Today, we can purchase a suitably equipped custom engine for around $500,000. At 5% per year, that $500,000 engine would cost
approximately:
- $740,000 in 2022 (10 years in service)
- $942,000 in 2027 (15 years in service)
- $1,202,000 in 2032 (20 years in service)
Today, we can purchase a suitably equipped custom aerial truck for around $800,000. At 5% per year, that $800,000 aerial would cost
approximately:
- $1,072,000 in 2020 (15 years in service)
- $1,368,000 in 2025 (20 years in service)
- $1,746,000 in 2030 (25 years in service)
(Keep in mind that these are assuming a worst case scenario in cost increases)
Lease -
Budgeting for leasing can be difficult to project due to the many different types of lease plans available. Over the last 10 years leasing
finance rates have varied from 2.75%- 6%, they are currently around 3%. An online leasing calculator projects that the annual lease
payment cost of a $500,000 engine to be:
- $80,255 per year for a 7 year lease; the estimated total expenditure for the engine is $561,785 ($80,255 x 7)
- $60,120 per year for a 10 year lease; the estimated total expenditure for the engine is $601,200 ($60,120 x 10)
- $54,050 per year for a 12 year lease; the estimated total expenditure for the engine is $648,600 ($54,050 x 12)
- $46,555 per year for a 15 year lease; the estimated total expenditure for the engine is $698,325 ($46,555 x 15)
(These payments are calculated annually in arrears)
Trade Value —
The budgeted pricing above does not take into account the trade value of the current engines. On average, new fire trucks depreciate
—5% per year for the first 10 years, from then on they depreciate —10% per year until the prices bottoms out. In the last round of vehicle
purchases, we were able to get —10% of the purchase price for trade on our previous engines that were under 20 years old and —40% for
the rescue trucks that were under 20 years in service.
2014 -2025 Capital Plan
Board Approved May 15, 2013
Year Purchased Project Description 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
BUILDING
Station 12008
Station 2 2007 Station Floor Recoating
Station 3 2012
Station 12005
Station 2 2004 Apparatus Bay Painting $30,000 $30,000
Station 3 2011
Station 12008
Station 2 2006 Interior Painting $20,000 $20,000
Station 3 2005
Station 12000
Station 22001 Training Room Furniture
Station 3 2005
Station 12005
Station 2 2005 Office Furniture $2,000 $6,000 $10,000
Station 3 2012
Station 1 (7)
Station 2 (5) Overhead Doors $147,000
Station 3 (9)
Station 12012
Station 2 2012 Interior Lighting $11,300
Station 3 2012
Station 12006
Station 2 2006 Vehicle Exhaust Systems $14,000
Station 3 2006
Station 1
Sleeping Quarter Furniture $5,000
Station 2
$45,000 $45,000
$10,000
$20,000
$30,000
$30,000
ADMINISTRATION/TECHNOLOGY
On-going
Computer workstations
$5,000 $4,800
$2,000
$4,800
$4,800 $4,800
$4,800
$5,000
$5,000
$5,000
$5,000
$5,000
$5,000
$5,000
On-going
Laptop workstations
$2,000 $2,400
$2,500
$2,500
$2,500
$2,500
$2,500
$2,500
On-going
Printers
$3,000
$2,000
$3,000
$2,000
$3,000
On-going
Tablets
$4,000
$4,000
$4,000
2009
Security System Upgrade
$30,000
2009
LCD Projectors (portable)
$1,500
2009
LCD Projector (fixed)
$2,000
2006
Audio Recorder
$5,000
2009
Telephone
$20,000
LOGIS
Cisco Access Points
$2,500
LOGIS
Fire Wall
$5,500
LOGIS
Cabling multi to single mode
$5,200
LOGIS
Station 1 Switch Upgrade
$3,840
LOGIS
Station 2 Switch Upgrade
$6,044
LOGIS
Wifi Controller
$2,847
LOGIS
Wifi replacement for obsolete unit
$2,426
LOGIS
Estimated Logis Cost
$10,000
$10,000 $10,000
$10,000
$10,000
10000
10000
10000
10000
10000
10000
Total
$7,000 $15,200
$25,357
$23,300
$14,800 $17,300
$16,300
$24,500
$47,000
$24,500
$35,000
$21,500
$18,000
$17,500
BUILDING
Station 12008
Station 2 2007 Station Floor Recoating
Station 3 2012
Station 12005
Station 2 2004 Apparatus Bay Painting $30,000 $30,000
Station 3 2011
Station 12008
Station 2 2006 Interior Painting $20,000 $20,000
Station 3 2005
Station 12000
Station 22001 Training Room Furniture
Station 3 2005
Station 12005
Station 2 2005 Office Furniture $2,000 $6,000 $10,000
Station 3 2012
Station 1 (7)
Station 2 (5) Overhead Doors $147,000
Station 3 (9)
Station 12012
Station 2 2012 Interior Lighting $11,300
Station 3 2012
Station 12006
Station 2 2006 Vehicle Exhaust Systems $14,000
Station 3 2006
Station 1
Sleeping Quarter Furniture $5,000
Station 2
$45,000 $45,000
$10,000
$20,000
$30,000
$30,000
2014 -2025 Capital Plan
Board Approved May 15, 2013
Year Purchased
Project Description
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Station 12008
$3,000
Station 2
Kitchens
Station 3
Station 1
$5,000
$5,000
$5,000
Station 2
Bathroom Upgrades
Station 3
Station 12008
$25,000 $
10,000
Station 2 2006
Carpeting/Alternative Flooring
Station 3 2005
Station 12011
$2,000
$2,000
Station 2 2005
Washing Machines
$3,000
Station 3 1991
Station 11985
Pressure Washers
$11,000
Station 2 1972
Station 3 1991
Station 3 Pressure Washer System
$27,300
$11,000__$205,000
$25,000
$80,000
$70,000
$45,000
$0
$20,000
$10,000
$73,000
Total
RESPIRATORY PROTECTION EQUIPMENT
Station 12007
$50,000
$50,000
$50,000
$50,000
$50,000
$50,000
$50,000
$50,000
$50,000
$50,000
$50,000
$50,000
$50,000
50,000
Station 2 2007
54-SCBA
Station 3 2007
Station 12006
Station 2 2007
3 -Fill Stations
Station 3 2011
Station 11995
$60,000
Station 2 1995
3 -Breathing Air Compressors
Station 3 1999
Total
$50,000
$50,000
$110,000
$50,000
$50,000
$50,000
$50,000
$50,000
$50,000
$50,000
$50,000
$50,000
$50,000
$50,000
PERSONAL PROTECTIVE EQUIPMENT
2007
10 -Turnout Gear Sets
$40,000
$25,000
$25,750
$26,500
$27,250
$28,000
$28,750
$29,500
$30,250
$31,000
$31,750
$32,500
Total
$40,000
$0
$25.000
$25,000
$25,750
$26,500
$27,250
$28,000
$28,750
$29,500
$30,250
$31,000
$31,750
$32,500
POWERED EQUIPMENT/TOOLS
2012
Thermal Imagers
$25,000
2011
Gas Powered Fans
$25,000
2011
Electric Fans
$18,000
2011
Chain Saws
$15,000
2011
Rescue Saw
2012
Hydraulic Rescue Tool
$25,000
$0
$0
$0
$0
$0
$0
$0
$0
$83,000
$0
$®
$®
$®
Total
$25,000
COMMUNICATION EQUIPMENT
$25,000
$27,500
$35,000
$35,000
$40,000
$40,000
2006
MDCs
$50,000
$50,000
$50,000
2004
Portable Radios $150,000
2004
Mobile Radios/Apparatus and Operations
$55,000
Year Purchased
On -Going
2011
Project Description 2012 2013
COMMUNICATION EQUIPMENT
Minitor Pagers $3,700
2014 -2025 Capital Plan
Board Approved May 15, 2013
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
$5,500 $5,500 $5,500 $5,500 $5,500
Portable Radio Batteries $6,000 $6,800 $10,000 $10,000
Total $89,700 $27,500 $5,500 $12,300 $55,500 $90,500 $90,500 $0 $10,000 $0 $40,000 $50,000 $0 $0
TECHNICAL RESCUE EQUIPMENT
2005 PPE $6,500
2005 Rope $2,000 $5,000
2000 Hardware
2010 RIT Bags/Equipment
1994 Trailer
2006 Boat
Boat Motor $6,000
2005 Ice Rescue Suits (9) $18,000
Total $2,000 $11,500 $0 $6,000 $0 $0 $0 $18,000 $0 $0 $0 $0 $0 $0
MEDICAL EQUIPMENT
2009 LUCAS
On -Going 1990 AED $4,000 $4,200 $4,200 $4,200 $4,200 $4,200 $4,200
2010 Pulse Ox $8,000
2010 0/2 Cylinders
Total $4,000 $4,200 $4,200 $4,200 $4,200 $12,200 $4,200 $0 $0 $0 $0 $0 $0 $0
FIRE SUPRESSION EQUIPMENT
2011 Hose $5,000
2007 Nozzles
2011 Adapters/Couplings/Reducers
$10,000
$10,000
Total $5,000 $0 $0 $0 $0 $0 $10,000 $10,000 $0 $0 $0 $0 $0 $0
HAZARDOUS MATERIALS EQUIPMENT
2010 Generator
2004 Trailer
2010 Mister
2009 Gas Monitors $3,000 $5,000 $5,000
Total $3,000 $5,000 $0 $0 $0 $5,000 $0 $0 $0 $0 $0 $0 $0 $0
PREVENTION
2010 Fire Extinguisher Training Prop $10,000
2009 Hazard House
2013 Sparky (Special Fund)
1999 Display Board $3,000
Total $0 $0 $0 $3,000 $0 $0 $0 $0 $10,000 $0 $0 $0 $0 $0
TRAINING
Rescue Manikins (Special Fund) $2,000
Total $2,000
2014 -2025 Capital Plan
Board Approved May 15, 2013
Year Purchased
Project Description
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
STAFFJUTILTY VEHICLES
2013
U-31
$51,500
$50,000
$42,000
$52,004
2004
C-11
$43,000
2004
C-24
$45,000
2007
C-31
$40,000
$51,000
2003
U-31
$46,000
2008
C-2
$47,000
2008
C-23
$44,000
2006
U-11
$49,000
2011
U-21
$48,000
2010
U-32
Total
$51,500
$0
$40,000
$42,000
$43,000
$44,000
$45,000
$46,000
$47,000
$48,000
$49,000
$50,000
$51,000
$52,000
$304,500
$126,400
$415,057
$190,800
$273,250
$350,500
$288,250
$176,500
$212,750
$308,000
$204,250
$202,500
$150,750
$152,000
Grand Total
MAJOR APPARATUS
2012
Heavy Rescue / evaluate
2004
Aerial / Next Purchase 2029
2011
Engines / Evaluate / Form Committee 2021
2013
Light Rescues
$90,000
$190,000
$110,000
(2) $220,000
2013
Grass Utility
$48,070
$50,000
Total
$138,070
$190,000
Beginning Fund Balance
City Contributions: unassigned
City Contrib: designated fire engines
Sales of Capital Assets
Other Revenue - Interest/Misc
Transfer from General or Special Fund
Total Revenue
Total Expenditures
Ending Fund Balance
West Metro Fire & Rescue District
Capital Budget
513,977 1,985,909 3,299,483 781,923 835,355 438,974 390,369 256,071 116,851 -9,814 33,637 41,055 -38,740 -13,184 14,250 98,572 182,065
Prepaid truck construction
Truck expense carry-over
Board approved carry-overs
Major Apparatus Carryover (Per F/B Policy)
Capital Carryover (Per F/B Policy)
Fund Balance Committed: 0 1,737,362 3,163,190
Fund Balance Uncommitted(Assigned): 513,977 248,547 136,293
Total Fund Balance 513,977 1,985,909 3,299,483
1,737,362 2,237,362
557,270
202,000
116,591
221500 167,500
239:9355/308,062
52,8 91,810
51 ,297 567,372
67,626 267,983
781,923 835,355
13 Carryover Represents
MDC Replacement
27,500
Turn Out Gear 2011
20,000
Projected
20,000
SCBA 2012
50,000
SCBA 2013
50,000
167,500
Actual
Actual
Actual
Actual
Actual
Budget
Budget
Budget
Budget Budget
Budget
Budget
Budget
Budget
Budget
Budget
Budget
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
592,622
513,977
1,985,909
3,299,483
781,923
835,355
438,974
390,369
256,071
116,851
-9,814
33,637
41,055
-38,740
-13,184
14,250
98,572
254,490
163,991
163,991
144,577
139,600
170,000
170,000
200,000
210,000
210,000
220,000
220,000
228,000
230,000
230,000
235,000
235,000
1,250,000
1,250,000
6,233
700
14,546
59,045
55,180
10,601
5,393
-4,431
6,267
3,910
4,177
2,195
1,952
1,280
584
-49
168
205
-194
-66
71
493
162,216
166,558
176,206
129,828
271,324
1,582,300
1,590,664
386,095
328,518
174,177
172,195
201,952
211,280
210,584
219,951
220,168
228,205
229,806
229,934
235,071
235,493
349,969
110,368
277,090
2,903,655
275,086
570,557
220,800
336,250
350,500
337,250
176,500
212,750
308,000
204,250
202,500
150,750
152,000
513,977 1,985,909 3,299,483 781,923 835,355 438,974 390,369 256,071 116,851 -9,814 33,637 41,055 -38,740 -13,184 14,250 98,572 182,065
Prepaid truck construction
Truck expense carry-over
Board approved carry-overs
Major Apparatus Carryover (Per F/B Policy)
Capital Carryover (Per F/B Policy)
Fund Balance Committed: 0 1,737,362 3,163,190
Fund Balance Uncommitted(Assigned): 513,977 248,547 136,293
Total Fund Balance 513,977 1,985,909 3,299,483
1,737,362 2,237,362
557,270
202,000
116,591
221500 167,500
239:9355/308,062
52,8 91,810
51 ,297 567,372
67,626 267,983
781,923 835,355
13 Carryover Represents
MDC Replacement
27,500
Turn Out Gear 2011
20,000
Turn Out Gear 2012
20,000
SCBA 2012
50,000
SCBA 2013
50,000
167,500
0 0 0 0 0 0 0 0
4 390,369 256,071 116,851 -9,814 33,637 41,055 -38,740 -13,184
4 390,369 256,071 116,851 -9,814 33,637 41,055 -38,740 -13,184
Amount represents Capital Budget for 2014 plus
$167,500 in approved 2013 carryovers
Elimination of the Major Apparatus and Capital Carryover set aside amounts
would be dedicated to three upcoming projects
Garage Doors 147,000
Breath Compressor 30,000
Turn Out Gear 25,000
202,000
0 0 0
50 98,572 182,065
50 98,572 182,065
H:\2014\BOARD\April 16\Budget\April 16 Copy of Option 2 2014-2025 Summary Projection for Capital Fund Updated for 2013 Activity.xlsx 4/4/2014 7:10 PM
WEST METRO FIRE -RESCUE DISTRICT
GENERAL FUND
FUND BALANCE POLICY
Purpose
The District shall maintain a general fund balance in order to bridge any cash flow needs and to
meet obligations for unanticipated expenses such as insurance deductibles, uninsured losses,
unexpected increases in supply/utility costs and other budget variables. The general fund
budget provides for payroll and benefits for full and part-time employees, supplies, and
adequate maintenance of buildings and equipment.
Policy
The District will strive to maintain a general fund balance equal to 10% of the annual general
fund budget of the subsequent year.
Calculation of Reserve
1. The general fund balance is calculated based on the most recent audited fund balance
of the general fund.
2. The goal for the general fund reserve shall be calculated as 10% of the subsequent
general fund budget.
3. Annually the District Board will review the general fund balance reserve. Any amount
by which the calculation in paragraph 1 exceeds the calculation in paragraph 2 will be
distributed as follows: 70% to major fire apparatus and 30% to capital equipment.
These amounts will be considered a committed portion of the Capital Fund balance
under the provisions of GASB 54.
4. If the fund balance calculated in paragraph 1 falls below the threshold established in
paragraph 2, the board will determine the appropriate action to replenish the fund at
the next board meeting or specially called meeting.
Provisions of GASB 54
GASB 54 provides for classification of Fund Balance in the following categories:
Nonspendable - This category includes the following:
Amounts that are not expected to be converted to cash, such as prepaid items or inventory,
Restricted —This category includes amounts that have an externally imposed constraint for a
specific purpose, by external parties or legislation
Constraints are legally enforceable
Examples include unspent grant proceeds and donor restricted contributions
Committed —This category includes amounts that have a self-imposed constraint for a specific
Purpose
Commitments require a Board resolution to make the constraint and a Board resolution to
change or remove the constraint
Fund balance commitment resolutions must be adopted before the end of the year, but the
exact amounts can be determined after year-end
Assigned —This category also includes amounts that have a self-imposed constraint for a
specific purpose
The constraint demonstrates the Board's intent
The Board authorizes the Chief to assign fund balance that reflects the Board's intended use of
thosefunds
Remaining positive amounts in governmental funds other than the general fund are considered
Assigned
Unassigned — This category includes amounts that are available for any purpose
Unassigned fund balance is reported only in the general fund and in other funds with negative
fund balances
Order of Spending
When a fund has both restricted and unrestricted fund balance, it is the District's policy to use
restricted resources first, then unrestricted resources as they are needed.
When a fund has any combination of committed, assigned, and unassigned fund balance, it is
the District's policy to use committed resources first, then assigned, and then unassigned
resources as they are needed.
Approved by the Board of Directors November 2, 2000
Modified by the Board of Directors December 15, 2004 (reserve balance adjusted from 25% to 17% of annual budget)
Modified by the Board of Directors June 8, 2005 (reserve balance adjusted from 17% to 14% of annual budget)
Modified by the Board of Directors November 14, 2006 (distribution of excess to vehicle and capital funds)
Modified by the Board of Directors November 9, 2011 (GASB 54 terminology/clarification of use of excess)
Modified by the Board of Directors April 11, 2012 (reserve balance adjusted from 14% to 10% with distribution 70% to major fire
apparatus and 30% to capital equipment. These amounts will be considered a committed portion of the Capital Fund balance
under the provisions of GASB 54)
New Business H-1
To: West Metro Administration
From: Matt Mayer, KDV
Re: Capital Fund Balance Policy
Current policy provides for the following components of Capital fund balance at the end of each fiscal
year:
• Committed for Major Apparatus — Amount represents 70% of general fund excess fund
balance transfers. This balance is to be utilized only to offset the City's costs of periodic
major apparatus purchases.
• Committed for Capital Equipment —Amount represents 30% of general fund excess fund
balance transfers. This balance is to be utilized for all other capital needs of the District.
• Committed for Carryovers —Amount represents board -approved carryovers of unspent
capital fund budget authorizations, including Turn Out Gear and SCBA roll -forwards.
• Assigned Fund Balance (Uncommitted) —Amount represents the residual fund balance
which has accrued over the years from unspent or underspent budget authorizations.
Two Issues to Consider
1. As the District looks ahead to its capital needs over the course of the next 10 to 15 years, it may
find the Committed for Major Apparatus set aside too restrictive. Currently the next
opportunity to utilize this balance (which will have grown to nearly $240,000 by the end of
2012) is 2015 with the planned purchase of rescue vehicles. I understand that an alternative to
this purchase may be in the works; if so, the next scheduled major apparatus purchase is in
2025.
Without a re -definition of "major apparatus" or a revision to the fund balance policy, there is
the potential that the District will be locking up nearly a quarter of a million dollars in available
resources for more than a decade.
The member cities have demonstrated a desire that their combined general and capital annual
contribution to the District is smoothed or level on a year-to-year basis. Because of the nature
of capital needs, this can sometimes be a challenge. Allowing a portion of fund balance to be
available as a way to smooth these annual contributions would be a valuable tool for
administration to help in achieving the member cities' objectives.
Recommendations
1. Revisit the 70% major apparatus allocation with the Board. If the board agrees that current
major apparatus needs have made this set-aside to restrictive, an alternative would be that
both this 70% and the current 30% set-aside be pooled into a "Committed for Future
Capital" account that could be used at the board's discretion for any specific future capital
needs of the District.
WEST METRO► FIRE -RESCUE DISTRICT
GENERAL FUND
FUND BALANCE POLICY
Pur ose
The District shall maintain a general fund balance in order to bridge any cash flow needs and to
meet obligations for unanticipated expenses such as insurance deductibles, uninsured losses,
unexpected increases in supply/utility costs and other budget variables. The general fund
budget provides for payroll and benefits for full and part-time employees, supplies, and
adequate maintenance of buildings and equipment.
Policy
The District will strive to maintain a general fund balance equal to 10% of the annual general
fund budget of the subsequent year.
Calculation of Reserve
1. The general fund balance is calculated based on the most recent audited fund balance
of the general fund.
2. The goal for the general fund reserve shall be calculated as 10% of the subsequent
general fund budget.
3. Annually the District Board will review the general fund balance reserve. Any amount by
which the calculation in paragraph 1 exceeds the calculation in paragraph 2 will be
distributed ° to capital equipment.
These amounts will be considered a committed portion of the Capital Fund balance
under the provisions of GASB 54.
4. If the fund balance calculated in paragraph 1 falls below the threshold established in
paragraph 2, the board will determine the appropriate action to replenish the fund at
the next board meeting or specially called meeting.
Provisions of GASB 54
GASB 54 provides for classification of Fund Balance in the following categories:
Nonspendable - This category includes the following:
Amounts that are not expected to be converted to cash, such as prepaid items or inventory,
Restricted ® This category includes amounts that have an externally imposed constraint for a
specific purpose, by external parties or legislation
Constraints are legally enforceable
Examples include unspent grant proceeds and donor restricted contributions
Committed — This category includes amounts that have a self-imposed constraint for a specific
purpose
Commitments require a Board resolution to make the constraint and a Board resolution to
change or remove the constraint
Fund balance commitment resolutions must be adopted before the end of the year, but the
exact amounts can be determined after year-end
Assigned — This category also includes amounts that have a self-imposed constraint for a
specific purpose
The constraint demonstrates the Board's intent
The Board authorizes the Chief to assign fund balance that reflects the Board's intended use of
those funds
Remaining positive amounts in governmental funds other than the general fund are considered
assigned
Unassigned —This category includes amounts that are available for any purpose
Unassigned fund balance is reported only in the general fund and in other funds with negative
fund balances
Order of Spending
When a fund has both restricted and unrestricted fund balance, it is the District's policy to use
restricted resources first, then unrestricted resources as they are needed.
When a fund has any combination of committed, assigned, and unassigned fund balance, it is
the District's policy to use committed resources first, then assigned, and then unassigned
resources as they are needed.
Approved by the Board of Directors November 2, 2000
Modified by the Board of Directors December 15, 2004 (reserve balance adjusted from 25% to 17% of annual budget)
Modified by the Board of Directors June 8, 2005 (reserve balance adjusted from 17% to 14% of annual budget)
Modified by the Board of Directors November 14, 2006 (distribution of excess to vehicle and capital funds)
Modified by the Board of Directors November 9, 2011 (GASB 54 terminology/clarification of use of excess)
Modified by the Board of Directors April 11, 2012 (reserve balance adjusted from 14% to 10% with distribution 70% to major fire
apparatus and 30% to capital equipment. These amounts will be considered a committed portion of the Capital Fund balance
under the provisions of GASB 54)
Memorandum
cITY of
CKYST
AL
DATE: June 26, 2014
TO: Mayor and City Council ^
FROM: Anne Norris, City Manager
SUBJECT: Update on Public Works Facility Actual Costs and Cost Estimates
In January, the City Council authorized acquisition of property for a new Public Works
Facility for the city. Since then, staff has successfully acquired the site at 5501 West
Broadway. Earlier this year the City Council also authorized execution of a contract
with Kodet Architectural Group, Ltd., for design of a new Public Works facility. Plans for
the new facility are nearing completion so the proposed project can be bid.
Staff will have actual acquisition costs to date and estimates for the construction costs
of the Public Works facility at the July 1 work session.
Memorandum
CITY of
CRYSTAL
DATE: June 26, 2014
TO: Mayor and City Council
FROM: Anne Norris, City Manager
Tom Mathisen, Public Works Director
SUBJECT: Financing Mill and Overlay Projects
Phase 1 (Winnetka Hills neighborhood) of the Street Reconstruction Program was
completed in 1997. Milling and overlays are required to maintain the reconstructed
streets in good condition as long as possible. Council Resolution #2010-48 outlines a
policy of specially assessing mill and overlay projects.
At recent work sessions, the Council discussed increasing the tax levy to pay for mill
and overlay projects rather than using special assessments. The cost of the Phase 1
mill and overlay project is approximately $1 million.
In order to help the Council determine options for financing mill and overlay projects,
Finance Director Charlie Hansen has prepared 3 schedules showing mill and overlay
projects financing in the following ways:
- Special assessments for 100% of the project (Schedule A);
- Tax levy (Schedule B); and
- Combination of 60% special assessments and 40% tax levy (Schedule C).
Schedule A — Assessing 100% of the mill and overlay projects
The assessment for Phase 1 is estimated to be $2,000 per single family home.
Assessments will pay off over 10 years at 5% interest. First year payment will be $200
toward principal and $100 for interest. Interest costs will decline by $10 each year as
the outstanding principal is reduced. Five percent is the interest rate we have used on
Phase 12 and 13 reconstruction assessments.
It has been our experience with the street reconstruction assessments that 20% to 25%
of property owners will prepay their special assessments. This scenario assumes that
20% will prepay.
This scenario assumes that all property will be assessed at the rate for a property on a
non -MSA street. A MSA street costs more to mill and overlay than a residential street.
All eligible MSA street costs will be submitted to the Department of Transportation for
reimbursement.
This scenario has the most severe cash flow problems. Phase 1 will incur estimated
costs of $962,228 in 2014. We will receive reimbursements from other cities for
$46,938 in 2014. Special assessment prepayments estimated at 20% times the
amount assessed (962,228 minus $46,938) or $183,058 will also be received in 2014.
The remaining $732,232 will be received over the ten years from 2015 through 2024.
So there is a large immediate outflow of cash, but most of the cash inflows happen
later.
Cash flow problems can be addressed through means such as an inter -fund loan.
Schedule B — Tax Levy
The first four Phases are planned to take place in 2014-2017. Then phase 5 will be
done in 2020 and phase 6 in 2025. This results in substantial cash outflows in the first
four years, followed by seven years with only one project. From 2025 onward, projects
will be needed almost every year.
All eligible MSA street costs will be submitted to the Department of Transportation for
reimbursement. However, the MSA reimbursements may not come in until several
years after the project is done.
This scenario has the same cash flow problems, but not as severe as the 100%
assessed scenario. The main problem is that the property tax levy will need to be
$1,000,000 or more the first three years. Then it can drop down to $250,000 for about
nine years, but then will need to increase sharply again.
It may be possible to smooth out the size of the property tax levy in the early years by
using an inter -fund loan to deal with cash flow problems.
At the last work session, there was discussion of some sort of "rebate" to property
owners who are still paying street reconstruction assessments. This would be rather
challenging to administer and the City Attorney is researching whether it is possible.
Schedule C — Combination of 60% assessment and 40% tax levy
The assessment for Phase 1 is estimated to be $1,200 per single family home.
Assessments will pay off over 10 years at 5% interest. First year payment will be $120
toward principal and $60 for interest. Interest costs will decline by $6 each year as the
outstanding principal is reduced. Five percent is the interest rate we have used on
Phase 12 and 13 reconstruction assessments.
The first four Phases are planned to take place in 2014-2017. Then phase 5 will be
done in 2020 and phase 6 in 2025. This results in substantial cash outflows in the first
four years, followed by seven years with only one project. From 2025 onward, projects
will be needed almost every year.
All eligible MSA street costs will be submitted to the Department of Transportation for
reimbursement. However, the MSA reimbursements may not come in until several
years after the project is done.
This scenario has no cash flow problems. The main problem is that the property tax
levy will need to be $600,000 to $800,000 for the first three years. Then it can be
eliminated as MSA reimbursements start to be received and sealcoat special
assessments from both phases 2 and 3 are received.
In Schedule A with the project 100% assessed, it is assumed the first sealcoat after a
mill and overlay is paid for by the city. In Schedules B and C, it is assumed the
sealcoats after the mill and overlay will be 100% assessed to property owners.
At the June 3 work session, there was discussion regarding some sort of "rebate" for
property owners still paying special assessments for a street reconstruction project if
mill and overlays are paid for with a general tax levy. This would be very challenging to
administer and the City Attorney is researching whether it is possible.
There was discussion at the June 17 work session about the ability of a charter city to
levy for "maintenance" improvements. Attached is a memo from the City Attorney
clarifying the authority cities have regarding paying for/financing street maintenance
and street improvements. The City Attorney will be at the July 1 work session to
answer questions.
If this year's mill and overlay project is to proceed this year, the Council needs to either
reaffirm the policy outlined in Resolution #2010-48 or establish a different form of
financing so the bids can be awarded for this year's project at the July 15 meeting. The
notice to residents regarding the June 17 public hearing on the Phase 1 mill and overlay
project assumed the use of special assessments. A typical assessment would be
approximately $2,000 paid over 10 years.
Attach: Schedules A, B and C
Resolution #2010-48
June 24, 2014 memo from City Attorney
SCHEDULE A
CITY OF CRYSTAL
STREET MAINTENANCE FUND ANALYSIS
Assess 100% of mill & overlay costs to benefited properties
3essments will pay off over 10 years and 5% interest will be charged. Street Maintenance fund will pay for the third seal coat since there will still be 3 years to
on the mill & overlay assessment. Assumes 20% of properties prepay special assessments.
Overlay Sealcoat
Other
Gen FD
Special Special
(ear
Contrib.
Assmt. Assmt.
!010
65,300
53,460
!011
167,250
34,992
!012
69,300
37,387
'.013
71,400
45,904
Other
72,800
City Invest
First
Phase
M.S.A. Reimb. Earnings
8
272,773 55,419
9,425 47,107
74,300
23,159 6 158,450
20,726 3,815 7 114,355
!014
72,800
213,422
0 46,938
18,547
1,463,205
8
156,389
!015
74,300
404,362
0 116,837
9,271
94,121
319,255
112,271
!016
76,529
340,406
18,590
3,333
150,542
9
158,042
1017
78,825
485,632
45,359
-19,510
8,122
10
226,399
2018
81,190
416,717
35,469 528,000
-37,875
105,934
753,624
119,722
2019
83,625
371,558
39,039 97,788
-14,744
168,665
11
124,064
X020
86134
481,794
119,176 304,178
-7,004
97,504
12
184,011
2021
88,718
412,736
171,322
361,025
1,463,205
2022
91,380
364,360
139,504
318,428
151,127
2023
94,121
319,255
112,271
61,937
1,661,166
2024
96,945
274,310
150,542
-24,410
1,192,139
2025
99,853
515,156
210,052
221,992
8,122
2026
102,849
539,395
136,770
337,400
153,364
2027
105,934
753,624
119,722
287,208
109,139
2028
109,112
608,262
168,665
-491,481
2029
112,385
840,372
134,556
164,538
97,504
2030
115,757
1,125,405
117,599
527,252
235,380
2031
119,230
934,102
139,034
8
192,339
2032
122 807
1,065,502
114,863
0
76,579
2033
126,491
1,259,958
2034
130,285
1,463,205
2035
134,194
1,583,407
2036
138,220
1,306,215
2037
142,366
1,501,242
2038
146,637
1,661,166
2039
151,037
1,424,613
2040
-24,410
1,192,139
2041
92,948
969,675
36th Ave 84
5.154,852
22,999,731 1,972,53'
596,719
168,042
480,393
21,194
338,359
170,999
358,965
Mill & Overlay
270,343
99,391
.254.525 1,762,826
5,470
13 195,940
19,401
Ending
18,084
14 191,381
10,451
Mill & Overlay
-5,498
15 202,223
-7,575
Ph 1 -3
-35,954
16 242,596
-17,730
927,083
-32,727
36th Ave 752,012
-38,421
2&3 289,528
-10,864
8,738
-24,410
1,908,638
-33,337
92,948
-45,279
36th Ave 84
-43,245
3
-17,811
-975,486
-39,085
-41,961
-8,982
4
7,477
-1,514,982
412,1011
2,244,562
isiness Unit 5865
5867
Business Unit 5866
Ending
second Sealcoat
Third Sealcoat
Patch
Mill & Overlay
Fund
Phase Costs
Phase Costs
Ph 1 -3
Phase Costs
Balance
1 101,366
927,083
36th Ave 752,012
1,989,992
2&3 289,528
40,000
8,738
36th Ave 41,862
1,908,638
5
92,948
7,025
36th Ave 84
1,872,925
45,626
79
1,854,710
4
120,717
40,000
1
962,228
927,083
40,000
2
1,269,680
222,172
5
92,948
20,000
3
1,365,526
-975,486
4
903,402
-1,514,982
-491,481
6
195,193
-233,473
7
119,607
5
760,000
-312,814
8
192,339
1
336,945
182,318
2
409,956
646,689
9
194,371
3
456,512
602,791
10
278,443
4
324,466
348,381
6
1,597,257
-183,251
11
152,582
7
978,740
-252,515
12
226,310
5
513,808
8
1,573,902
-1,198,483
-590,995
13
240,982
9
1,590,531
-1,090,883
10
2,278,482
-1,280,698
14
235,375
-362,128
6
571,838
11
1,248,575
-813,655
15
248,708
7
323,771
12
1,851,887
-1,111,221
8
545,327
13
1,914,508
-1,509,315
16
298,363
14
1,815,497
-1,441,496
9
553,383
-593,689
10
775,563
15
1,918,341
-1,302,831
16
2,234,308
-1,398,686
11
434,402
-299,399
12
634,532
249,227
13
683,362
543,017
9 QRR RIT3
I
&563.8651161,389l
25,056,901
SCHEDULE B
CITY OF CRYSTAL
STREET MAINTENANCE FUND ANALYSIS
Levy 100% of the mill & ovelay costs to the property tax i
cond and third seal coat assessments will pay off over 3 years and 5% interest will be charged. Assumes 20% of properties will prepay special assessments.
Property Sealcoat
Gen FD Tax Special
fear Contrib. Levy Assmt. M.S.A.
2010 65,300
2011 167,250
2012 69,300
2013 71,400
2014 72,800
2015 74,300 1,000,000
2016 76,529 1,100,000
2017 78,825 1,050,000
2018 250,000
2019 250,000
2020 250,000
2021 250,000
2022 250,000
2023 250,000
2024 250,000
2025 250,000
2026 250,000
2027 750,000
2028 750,000
2029 1,000,000
2030 1,000,000
2031 900,000
2032 1,000,000
2033 1,200,000
2034 1,200,000
2035 1,200,000
2036 1,200,000
2037 1,200,000
2038 1,400,000
2039 200,000
2040 100,000
2041 100,000
Other
Business Unit 5866
Ending
City
Invest
First Sealcoat
Reimb.
Earnings
Phase Costs
272,773
55,419
226,399
9,425
47,107
8,738
889
23,159
6 158,450
20,726
3,815
7 114,355
46,938
16,830
8 156,389
116,837 5,402
18,590
Business Unit 5866
Ending
6,406
9
158,042
44,615
Phase
Costs
-159
10
226,399
35,134
528,000
8,738
889
41,862
1,820,186
39,039
97,788
84
25,487
11
124,064
117,614
304,178
40,000
28,279
12
184,011
237,051
361,025
1,269,680
18,665
20,000
3
381,259
318,428
151,127
28,788
13
195,940
527,025
61,937
44,499
587,969
942,628
51,477
14
191,381
535,430
221,992
8,122
54,331
258,416
337,400
153,364
38,510
15
202,223
118,502
287,208
109,139
29,634
6
166,305
1,283,667
-952
16
242,596
133,742
164,538
97,504
19,231
115,671
527,252
235,380
6,736
1,590,531
224,533
138,166
10
2,278,482
-5,067
227,348
0
76,579
18,864
1,248,575
131,193
339,237
596,719
168,042
3,936
13
480,630
480,393
21,194
443
1,815,497
-290,647
384,142
338,359
170,999
-7,872
15
316,810
-185,332
-8,719
2,234,308
-291,174
265,624
358,965
19,922
364,291
270,343
99,391
-5,560
39,223
459,150
-8,735
628,582
-2,255
605,451
499
7,525,795 5,254,525
1,762,826 1,190,972
2,244,562
usiness Unit 5865
Second Sealcoat Third
Phase Costs Phase
1 101,366
2&3 289,528
4 120,717
5 92,948
6 195,193
7 119,607
8 192,339
9 194,371
10 278,443
11 152,582
12 226,310
13 240,982
14 235,375
15 248,708
16 298,363
1 336,945
2 409,956
3 456,512
4 324,466
5 513,808
6 571,838
7 323,771
8 545,327
9 553,383
10 775,563
11 434,402
12 634,532
13 683,362
6,563,865
5867
Business Unit 5866
Ending
batch
Mill &Overlay
Fund
h 1 - 3
Phase
Costs
Balance
36th Ave
752,012
1,936,532
8,738
36th Ave
41,862
1,820,186
7,025
36th Ave
84
1,747,086
45,626
79
1,682,967
40,000
1
962,228
540,201
40,000
2
1,269,680
427,059
20,000
3
1,365,526
-7,932
4
903,402
35,548
849,571
942,628
5
716,927
622,153
959,610
1,483,315
1,715,893
1,811,050
6
1,597,257
1,283,667
7
978,740
987,813
8
1,573,902
-31,725
641,032
9
1,590,531
224,533
10
2,278,482
-168,909
628,815
11
1,248,575
131,193
12
1,851,887
14,760
13
1,914,508
-262,414
14
1,815,497
-290,647
664,061
15
1,918,341
-185,332
16
2,234,308
-291,174
-75,161
16,635
39,223
161,3891 25,013
SCHEDULE C
CITY OF CRYSTAL
STREET MAINTENANCE FUND ANALYSIS
Special assess 60% of the mill and overlay costs. Levy 40% to the property tax.
Mill & overlay assessment will pay off over 5 years and 5% interest will be charged. Second and third seal coat assessments will pay off over 3 years and 5% interest will be
charged. Assumes 20% of properties will prepay special assessments. MSA will pay for mill & overlay of MSA streets. The combination of a property tax levy, MSA
reimbursement and other city reimbursement will cover the 40% of mill & overlay costs that are not assessed.
A Sealcoat
Second Sealcoat
Property Overlay
Sealcoat
Phase Costs
Other
Ph 1 - 3
Phase
Gen FD
Tax Special
Special
36th Ave
City
Invest
Year
Contrib.
Levy Assmt.
Assmt.
M.S.A.
Reimb.
Earnings
2010
65,300
53,460
79
1,682,967
272,773
55,419
2011
167,250
34,992
2
1,270,000
9,425
47,107
2012
69,300
37,387
23,159
2013
71,400
45,904
20,726
3,815
2014
72,800
144,731
46,938
16,830
2015
74,300
800,000 302,967
116,837
5,024
2016
76,529
800,000 310,698
18,590
7,373,
2017
78,825
600,000 379,710
44,615
1,375
2018
364,415
35,134
528,000
1,097
2019
308,673
39,039
97,788
29,176
2020
198,642
117,614
304,178
33,838
2021
97,678
237,051
361,025
21,558
2022
169,247
381,259
318,428
151,127
37,307
2023
119,563
527,025
61,937
63,150
2024
104,349
587,969
80,469
2025
280,405
535,430
221,992
8,122
89,558
2026
398,743
258,416
337,400
153,364
75,706
2027
550,661
118,502
287,208
109,139
72,408
2028
488,457
166,305
52,539
2029
602,025
133,742
164,538
97,504
66,480
2030
813,763
115,671
527,252
235,380
43,464
2031
679,507
138,166
27,175
2032
668,661
227,348
76,579
45,459
2033
733,145
339,237
596,719
168,042
38,543
2034
917,469
480,630
480,393
21,194
31,796
2035
960,141
384,142
338,359
170,999
32,305
2036
768,518
316,810
25,468
2037
887,215
265,624
358,965
58,792
2038
1,012,182
364,291
270,343
99,391
48,360
2039
841,492
459,150
35,167
2040
599,232
628,582
75,242
2041
411,999
605,451
114,333
9 R7F 5R9
9 9nn non 14286.032
7.525,795
5,254,525
1,762,826_2,041,458
A Sealcoat
Second Sealcoat
Third
se Costs
Phase Costs
Phase
Ph 1 - 3
Phase
1 101,366
Balance
2&3 289,528
36th Ave
6 158,450
1,936,532
8,738
7 114,355
41,862
1,820,186
8 156,389
4 120,717
84
9 158,042
5 92,948
10 226,399
11 124,064
12 184,011
13 195,940
14 191,381
15 202,223
16 242,596
6 195,193
7 119,607
8 192,339
9 194,371
10 278,443
11 152,582
12 226,310
13 240,982
14 235,375
15 248,708
16 298,363
1 336,945
2 409,956
3 456,512
4 324,466
5 513,808
6 571,838
7 323,771
8 545,327
9 553,383
10 775,563
11 434,402
12 634,532
13 683.362
5867
Business Unit 5866
Ending
Patch
Mill & Overlay
Fund
Ph 1 - 3
Phase
Costs
Balance
36th Ave
752,012
1,936,532
8,738
36th Ave
41,862
1,820,186
7,025
36th Ave
84
1,747,086
45,626
79
1,682,967
40,000
1
1,000,000
502,429
40,000
2
1,270,000
491,557
3 1,365,000 68,757
4 903,000 43,882
972,529
1,127,947
5 760,000 718,601
1,243,574
2,105,002
2,682,306
2,985,269
6 1,597,257 2,523,519
7 978,740 2,413,602
8 1,573,902 1,751,308
2,216,013
9 1,590,531 1,448,789
10 2,278,482 905,837
1,515,311
11 1,248,575 1,284,783
12 1,851,887 1,059,874
13 1,914,508 1,076,849
14 1,815,497 848,936
1,959,733
15 1,918,341 1,611,988
16 2,234,308 1,172,247
2,508,056
3,811,112
4,942,896
25.094,065
Kennedy
Graven
CHARTERED
Michael T. Norton
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis MN 55402
(612) 337-9242 telephone
(612) 337-9310 fax
email: mnorton@kennedy-graven.com
MEMORANDUM
TO: Crystal City Council
FROM: Michael T. Norton, City Attorney
DATE: June 24, 2014
RE: Crystal Charter Authority: Street Maintenance
BACKGROUND
The issue of street reconstruction and street maintenance has been discussed at several
work sessions in the past year, most recently in the context of the financing for the Winnetka
Hills Mill and Overlay Project 2014-21. The discussion has concerned whether the mill and
overlay is maintenance and therefore should be financed as part of a general levy, or street
reconstruction, which is more suitably financed as a capital improvement by assessing benefitted
property.
This discussion also arises in the context of Council Resolution 2010-48 which in part
states that mill and overlay projects should be financed by special assessments.
In addition, there has been some discussion suggesting that the Crystal Charter provides
additional authority to Crystal as a charter city to consider street maintenance, however defined,
separately from the authority in Minn. Stat. Chapter 429 which provides that improvements
defined therein as suitable for financing by special assessment.
DISCUSSION
Charter Chapter 8 provides in part as follows:
Section 8.01. Powers. The city may make any type of public improvement not forbidden
by law and may levy special assessments against benefited property to pay all or a
portion of the cost of a local improvement. The special assessments for a local
improvement may equal the cost of the improvement but may not exceed the special
benefit to the property assessed.
446057v2 MTN CR205-30
Section 8.02. Current Services. In addition to the provisions of law the council may
provide by ordinance that the cost of city services to streets, sidewalks or other public or
private. property, may be assessed against the property served and collected in the same
manner as special assessments. (Emphasis provided).
There is no definition of what constitutes "...city services to streets, sidewalks..." in § 8.02.
However, such services "may be assessed... in the same manner as special assessments".
Minn. Stat. § 429.021 provides in part as follows:
429.021 LOCAL IMPROVEMENTS, COUNCIL POWERS.
Subdivision 1. Improvements authorized. The council of a municipality shall have power
to make the following improvements:
(1) To acquire, open, and widen any street, and to improve the same by constructing,
reconstructing, and maintaining sidewalks, pavement, gutters, curbs, and vehicle parking
strips of any material, or by grading, graveling, oiling, or otherwise improving the same,
including the beautification thereof and including storm sewers or other street drainage
and connections from sewer, water, or similar mains to curb lines.(Emphasis provided)
This statute is also permissive in the sense that if a council wishes, it may finance an
"improvement" by means of an assessment adopted pursuant to § 429.031, or use other lawful
methods authorized by law, including a general levy.
It should be noted that the statute defines only what type of "improvement", including
"maintaining" streets, is eligible to be assessed, but provides no specifics as to what degree of
effort or activity comprises "maintaining" streets. Therefore, subsequent to constructing a street
("open"), "maintaining" streets, sidewalks, pavement, etc., to any degree is still an improvement
eligible for financing by special assessment.
To date, Crystal has not defined the various types of street repairs it undertakes differently from
the list of "improvements" authorized for assessment under Chapter 429. Thus while Crystal as a
charter city may have some reservoir of authority to address street repair issues differently from
non -charter cities, such authority has not been exercised to date.
Moreover, even assuming Crystal has extra powers concerning street repairs, the Charter does
not set out a specific procedure to finance street repairs other than by special assessments.
Therefore, the procedure to be followed, if the Council wants to finance an authorized
improvement currently under consideration by means of an assessment, is the process set out in
Minn. Stat. § 429.031. Since both Chapter 429 and the Charter language are permissive as to the
use of assessments, the Council can make the policy judgment to assess or levy for any and all
street reconstruction, mill and overlay, street sprinkling etc.
446057v2 MTN CR205-30
CONCLUSION
The Council's historic and current discussions about the various types of street improvements
Crystal undertakes, including mill/overlay, all seem to be included in the definition of
"improvement" in § 429.021 and Charter §§ 8.01 and 8.02. Thus, the Council is free to define (or
not) any action to improve or maintain streets and sidewalks as "maintenance", and determine
the appropriate method of financing, special assessment, general levy or a combination of each
method.
446057v2 MTN CR205-30 3
Memorandum
CITY of
CRYSTAL
DATE: June 25, 2014
TO: Mayor and City Council Ct—/
FROM: Anne Norris, City Manager 01
SUBJECT: 2015 Budget Assumptions
Staff is preparing the 2015 budget. As you know, the Council will review the majority of
the 2015 budget during work sessions on August 7, 14 and 21. The Council's review
will start with the general fund budget on August 7.
Listed below are assumptions Finance Director Charlie Hansen and I are using as we
prepare the 2015 budgets.
Revenues;
Local Government Aid (LGA) — Based on the City Council's action with the
2014 budget, we are assuming that we will maintain LGA at the 2012 level going
to general fund operations (approximately $1,450,000). Any additional LGA will
go directly into the Permanent Improvement Revolving Fund (PIR) — a capital
fund.
Investment Income — will continue to trend down and be reduced from the 2014
estimate.
Tax levy — as close to 0 increase as possible and continuing the County Road
81 levy to cover actual construction costs.
Expenditures:
Wages — While we have no settlements with employee bargaining groups for
2015, we are going to arbitration with one for the 2014-2015 contract. We are
assuming a modest increase for all employees, based on settlements in other
cities and the CPI.
Health Insurance — We are assuming an 11 % increase that will be shared
between employer and employee.
Capital projects — Maintain existing fleet and equipment but we are still trying to
catch up from years when we were not able to replace vehicles and equipment
and continued decreased interest contributions to the funds.
Service levels - maintain at current levels, to the extent possible, and assume
the Frolics will continue to pay for portion of city staff costs for the event.
The Council should discuss and provide direction on these assumptions.
Memorandum
CITY of
CRYSTAL
DATE: June 26, 2014
TO: Mayor and City Council
FROM: Anne Norris, City Manager
SUBJECT: Replenishing the Major Building Replacement Fund
Late last year in a work session, the City Council discussed ways to pay for a new
Public Works facility, estimated to cost approximately $13. While no formal vote was
taken, it appeared the preferred option was utilizing the balance of the Major Building
Replacement Fund (MBRF) — approximately $10,300,000 — and funds from the utility
and EDA funds.
In May, the Council discussed options for replenishing the MBRF for future needs. At
that time, the Council asked for additional information on:
- Future demands on the MBRF;
- Extending the MBRFbudget out another 10 years (in progress but not
complete);
- Comparing the costs of bonding versus interest earned on a portion of the
MBRF; and
- Financing the new Public Works facility using a combination of cash and
bonding.
Future Demands on the MBRF:
The next significant building project is a renovated or new Police Department. A needs
assessment has not been completed and is preliminarily scheduled for 2016 and is
estimated to cost $10,000 - $15,000. It is likely a police department would need 20,000
square feet at approximately $230 per square foot for new construction, depending on
finish and amenities, excluding land costs. The Community Center is approaching 30
years old and while we've done a good job of maintaining what is there, it may be
appropriate to do an assessment of how the building is used with what current
community needs are. The Becker Park building is over 30 years old, has significant
maintenance work needed (a new roof) and needs extensive renovation in order to be
attractive to potential users.
Continuing the $563,153 annual property tax levy and depositing the revenue in the
MBRF would start to rebuild the fund, although would likely not cover the entire cost of
a Police Department renovation of new construction. It would allow the city to avoid
bonding for the entire cost.
Financing the Public Works Facility using Cash and Bonding:
Attached are 2 bond amortization schedules for $5,000,000. Schedule A is for a
$5,000,000 bond issue with a 12 year term which has the tax levy approximate the
current Highway 81 tax levy. Schedule B is for a $5,000,000 bond issue with a 14 year
term and shows that extending the term of the bond issue reduces the tax levy but
increases total interest costs.
Replenishing the MBRF is a worthy goal and having some cash on hand for future
construction projects will make those projects easier. Finance Director Charles
Hansen and I will be at the July 1 work session to answer questions.
Attach:
SCHEDULE A
Public Works Facility Financing Alternatives
$5,000,000 Bond Issue
Bonds (12 year)
Remaining
Assume 3% interest
Required
Tax Levy
Tax Levy
Tax
with 5%
to Debt
Year
Principal
Interest
LM
Overlevy
Service FD
2014
0
0
0
2015
0
225,000
540,000
567,000
27,000
2016
165,000
150,000
545,050
572,303
27,253
2017
400,000
145,050
548,050
575,453
27,403
2018
415,000
133,050
545,600
572,880
27,280
2019
425,000
120,600
547,850
575,243
27,393
2020
440,000
107,850
549,650
577,133
27,483
2021
455,000
94,650
551,000
578,550
27,550
2022
470,000
81,000
551,900
579,495
27,595
2023
485,000
66,900
552,350
579,968
27,618
2024
500,000
52,350
552,350
579,968
27,618
2025
515,000
37,350
556,900
584,745
27,845
2026
535,000
21,900
200,850
210,893
10,043
2027
195,000
5,850
0
0
0
2028
0
0
0
0
0
2029
0
0
0
0
0
2030
0
0
0
Total
5,000,000
1,241,550
6,241,550
6,553,628
312,078
After three or four years, there will be a sufficient balance in the debt service
fund so that the 5% overlevy could be discontinued. Or if the 5% overlevy
were continued, the balance in the debt service fund would allow the 2027
bonds to be called for early redemption in 2026.
SCHEDULE B
Public Works Facility Financing Alternatives
$5,000,000 Bond Issue
Bonds (14 year) Remaining
Assume 3% interest Required Tax Levy Tax Levy
Tax with 5% to Debt
Year
Principal
Interest
LSC
Overlevy
Service FD
2014
0
0
0
2015
0
225,000
460,000
483,000
23,000
2016
85,000
150,000
462,450
485,573
23,123
2017
315,000
147,450
463,000
486,150
23,150
2018
325,000
138,000
463,250
486,413
23,163
2019
335,000
128,250
468,200
491,610
23,410
2020
350,000
118,200
467,700
491,085
23,385
2021
360,000
107,700
466,900
490,245
23,345
2022
370,000
96,900
465,800
489,090
23,290
2023
380,000
85,800
469,400
492,870
23,470
2024
395,000
74,400
467,550
490,928
23,378
2025
405,000
62,550
470,400
493,920
23,520
2026
420,000
50,400
472,800
496,440
23,640
2027
435,000
37,800
474,750
498,488
23,738
2028
450,000
24,750
386,250
405,563
19,313
2029
375,000
11,250
0
0
0
2030
0
0
0
Total
5,000,000
1,458,450
6,458,450
6,781,373
322,923
After three or four years, there will be a sufficient balance in the debt service
fund so that the 5% overlevy could be discontinued. Or if the 5% overlevy
were continued, the balance in the debt service fund would allow the 2029
bonds to be called for early redemption in 2028.
Memorandum
CITY of
CRYSTAL
DATE: June 26, 2014
TO: Mayor and City Council
FROM: Anne Norris, City Manager 44�
SUBJECT: Financing Crystal's Share of the JWC Emergency Water Supply
Earlier this year the City Council reviewed options for funding Crystal's share of the
JWC's emergency water supply. The total cost of the emergency water supply is
estimated at $4 million; Crystal's share is approximately $1 million. The contract for the
wells has been awarded and work on drilling the wells will commence later this summer.
There will be an additional contract for piping to get the water from the wells into the
JWC system.
At its April 10 meeting, the Council considered financing Crystal's share of the project
costs by:
Adding a $.21 per unit charge to each water user's utility bill as a separate
line item on the utility bill designated as "emergency water supply charge" (or
something similar)
Create internal loans to the water fund of $300,000 from the sewer fund and
$300,000 from the street light fund
The Council needs to confirm this financing plan so the rates and loans can be added
to the July 15 City Council agenda for formal action.