The beginning of the budget process involved the preparation of the 5-year Capital Improvement Plan (CIP).  Capital Improvements are the projects that require the expenditures of public funds for the acquisition, construction or replacement of infrastructure and capital assets necessary for the community.  The creation and update of a multi-year capital plan allows the city to plan for its current and long-term needs.  Project areas within the CIP include buildings, equipment replacement, information technology, parks, streets, tree replacement, sanitary sewer and storm drainage.

The CIP is part of the budget process, but its not a budget, it is a plan.  It is also a plan that changes often.  Once the CIP is officially adopted by council, the 2022 projects will then be added to the 2022 budget for final approval in December.  All future year's projects (2023 and beyond) are plans at this point that are subject to change and will be updated in future CIP's.  City staff is currently updating the 15-year CIP that will be included as an appendix.

The city has finite amount of resources, so prioritizing projects and then being able to finance projects is crucial for ensuring the city's long-term sustainability and being responsible stewards of the city's investments.  Staff has been working diligently the last couple years to try and better estimate project costs to ensure more accurate forecasting or available fund balances.  In addition, staff is continually working to find outside funding solutions to limit the impact on the tax levy.

The plan for the workshop is to have a general overview of each fund and then review various projects within each fund.  Staff is seeking the council's input in regards to project direction and priority.  Below are a few highlights from various funds.

Park Development Fund

The Park Development fund incorporated projects identified from the Parks Master Plan that was completed two years ago.

• A few of the larger projects will require additional planning sessions down the road to determine appropriate financing options.

• A property tax levy of $200,000 which was approved in 2020, was eliminated with the 2021 budget.  Traditionally, this fund is primarily supported by park dedication fees.  Park Dedication fees will remain the primary source, but there are also projects that need additional funding beyond the park dedication means.  It is also anticipated that future park dedication fees will curtail as developers have the option to contribute land in lieu of fees.
• Huber Park is currently contingent upon receiving and the timing of State of Federal funding.

Capital Improvement Fund

• The plan identifies over $23.1 million in 2022 CIF projects including overlays and reconstruction projects.  Recurring funding sources include tax levy, franchise fees, special assessments, municipal state aid and special assessments.
• The Highway 169 Pedestrian Bridge has been included within the fund. The project was previously included under the Parks Development fund, but staff feels it is ultimately a better fit for the CIF fund. This project has been approved for State bonding, but the funding for the City share of costs will need to be determined.
• Various Canterbury Commons public improvements have been included in the CIF fund.  However, staff feels with an amendment to the TIF agreement the entire cost of the projects can be funded through the issuance of a TIF Bond and repaid with tax increment revenue.
• A property tax levy of $700,000 was approved for 2021, however despite the levy funding there will not be enough available to complete the planned 2022 projects.  Staff anticipates proposing a bond issue in 2022 to finance street projects (repaid from a debt service levy and special assessments).

Park Asset Fund

• In 2020, the council approved transferring the community center, ice area and SandVenture facilities and their respective rent accumulations to the Building fund from the Park Asset fund.  The Park Asset fund now strictly accounts for just park and trail improvements.
  
  

A final 2022-2026 CIP will be prepared after receiving council input and direction.  The goal is to have it officially adopted in September.  As mentioned earlier, the 2022 projects will then be incorporated into the 2022 operating budget for further consideration in the adoption of the overall 2022 budget.