09-23-19 CC WS Agenda Packet
CITY OF SHOREWOOD 5755 COUNTRY CLUB ROAD
CITY COUNCIL WORK SESSION COUNCIL CHAMBERS
MONDAY, SEPTEMBER 23, 2019 6:00 P.M.
AGENDA
1. CONVENE CITY COUNCIL WORK SESSION
A. Roll Call
Mayor Zerby _____
Johnson _____
Labadie _____
Siakel _____
Sundberg _____
B. Review and Adopt Agenda
2. CAPITAL IMPROVEMENT PLAN (CIP) Director of Finance Memo
3. ADJOURN
#2
MEETING TYPE
City of Shorewood Council Meeting Item
SPECIAL
Title / Subject:
Capital Improvement Plan 2020-2029
Meeting Date: September 23, 2019
Prepared by: Joe Rigdon, Finance Director
Reviewed by: Greg Lerud, City Administrator; Marie Darling, Planning Director; Larry Brown,
Public Works Director; Alyson Fauske, City Engineer
Attachments: Capital Improvement Program 2020-2029: Projects by Funding Source
Capital Improvement Program 2020-2029: Street Improvements: Projects &
Funding Sources by Department
Capital Project funds Revenue & Expenditure Projections
Policy Consideration:
On an annual basis, the City Council adopts a Capital Improvement
Plan (CIP). The CIP lists major capital improvements, and the sources to pay for them. Items
in the CIP are not mandated, and the Council reviews capital spending throughout the year.
Background:
Shorewood Community & Event Center (SCEC): Capital items for the SCEC include
building improvements and equipment for the Center. Transfers from the General Fund
are the planned source to pay for these items.
Park Improvements: In recent years, the parks CIP has included significant
expenditures for projects and proposes various improvements going forward. Due to a
difference of projects in the CIP compared to revenue, the Park Improvements fund is
projected to become negative in 2021, and subsequently show a fund balance deficit
thereafter. Staff is recommending two approaches to eliminate this deficit. First, it
appears that approximately $50,000 per year, through 2029, can be taken from the
Equipment Replacement fund and reallocated to the Park Improvements fund. These
funds will be in addition to the planned $45,000 already being proposed to be allocated
to the Park Improvements fund in the 2020 budget. That amount, combined with an
annual increase of $5,000 for the Park Improvements fund will provide approximately
$550,000 for park capital. The second component to reducing the anticipated deficit is
to take a critical look at the projects on the Parks CIP and plan projects that can be done
for that amount. To that end, the Parks Commission discussed projects at their last
meeting and have developed a priority list.
Equipment Replacement: The majority of the CIP for equipment replacement pertains to
Public Works items, but also includes some administrative technology items. The City’s
Equipment Replacement capital fund projection maintains a positive level throughout the
duration of the ten-year CIP. As noted above in the Park Improvements section, it
appears that around $50,000 per year of the amount transferred annually to the
Mission Statement: The City of Shorewood is committed to providing residents quality public services, a
healthy environment, a variety of attractive amenities, a sustainable tax base, and sound financial
management through effective, efficient, and visionary leadership. Page 1
Equipment Replacement Fund could be shifted to the Parks Fund without depleting the
Equipment fund. A transfer in of $145,000 from the General Fund to the equipment fund
was initially planned for 2020 but could be decreased to $95,000 and increased
thereafter by $5,000 per year.
Street Improvements: City staff has met and discussed overall infrastructure system
recommendations and is proposing the following options:
2020: Enchanted and Shady Island Roads
o
2020: Glen/Amlee/Manitou
o
2020: Woodside Road/Lane
o
2021: Edgewood Road
o
2022: Birch Bluff Road
o
2022: Noble Road
o
2023: Strawberry Lane
o
2023: Grant Lorenz
o
2024: Sweetwater Curve
o
2025: Excelsior Blvd
o
2026: Eureka Road
o
For each of the proposed street improvement projects, it is assumed that the Water,
Sewer, and Stormwater funds will fund associated utility costs. Beginning in 2020, the
Street Reconstruction fund activities are projected to result in a significant fund deficit.
In addition, the City’s utility funds may be significantly depleted. In order to complete the
proposed street projects from 2020 and on, significant financing sources must be
determined. This will likely require bonded debt financing and allow for the spreading of
repayments over a period of years. To repay the bonded debt, a combination of annual
property tax levies and utility fund contributions will be necessary.
In addition to these significant projects, staff also recommends that the money that has
been set aside for annual seal coating, approximately $225,000 per year, but spent on
even year projects for work that will total around $450,000. That will allow the city to
address either emerging street issues, or doing overlay projects rather than the road
degrading to a point that requires the cost of a reclaim or reconstruction.
A transfer in of $835,000 from the General Fund to the Street Reconstruction fund is
currently budgeted for 2020, which is a $25,000 increase from the 2019 budget.
At the annual Council retreat in February 2019, Shannon Sweeney of David Drown and
Associates presented a street and utility reconstruction project funding model. The
analysis suggested that “the property tax levy that supports street reconstruction project
funding would need to increase by approximately 9% per year through 2028 to sustain
cash balances and eliminate annual funding deficits”. Upon review, implementation of
those increases would begin in 2021 and would be re-analyzed each year. Staff will be
analyzing that increase over the next few months to see if the programming can be
accomplished by a lower levy increase amount.
Trails: Placeholder amounts are included. Projects are to be determined.
Utility Funds: The Capital Improvement plans for Water, Sewer, and Stormwater funds
include equipment, portions of street infrastructure projects, as well as maintenance and
preventative maintenance items. As noted, the utility funds cash reserves are not likely
to be sufficient to finance the utility portions of the proposed street improvements. In
order to finance the improvements, bonded debt with debt service repayments supported
by property tax levies and utility revenues will be necessary.
Next Steps and Timelines:
Additional discussion may be scheduled. The 2020-2029 Capital
Improvement Plan will be on the 12/09/19 City Council agenda for approval.