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 2023 projects will then be added to the 2023 budget for final approval in December. All future year's projects (2024 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.

New this year, staff intends to add a 20-year Equipment Replacement Schedule as an additional appendix in the CIP book. The equipment list encompasses all city equipment, their estimated lives and scheduled replacement cost. Please note that the document is formatted to placed in the book side by side (so that the schedule could be larger and easier to read). This will be a standalone document from the 15-year CIP.

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.

Capital Improvement Fund

• The plan identifies over $41 million in CIF projects including overlays and reconstruction projects for 2023-2027. Recurring funding sources include tax levy, franchise fees, special assessments, municipal state aid and special assessments.
• The recent 2022 bond issue provided an additional $4.17 million of funding, and our current cash flow analysis shows funding is sufficient for 2022/2023 scheduled projects including city share of the Highway 169 Pedestrian Bridge.
• Various Canterbury Commons public improvements were previous shown in the CIF fund in the CIP, despite being funded/accounted for in a separate fund for the TIF District. The projects are now shown separately in a TIF section of the CIP.

Park Development Fund

• The Park Development fund includes 15 projects for 2023/2024 totaling $9.5 million, including Huber Park playground enhancement, Lions Park renovation, Windermere Bluff, Killarney Hills, Riverfront Marina, and the Cultural Corridor.
• Park Dedication fees remain the primary source of funds. The City received $3.5 million in park dedication fees in 2021 and anticipates $2.7 million for the current year.

Building Internal Service Fund

• Current year/2023 projects include SandVenture improvements. The project is currently being designed and will be brought back to Council for direction on the scope and financing options. This could include a combination of accumulated building funds, Local Project Funds and interfund loans.
• River City Centre renovations were added to the building internal service fund, however funding would come from tax increment or leave revenue. The project is contingent upon the City’s acquisition of the master retail lease.
• The Innovation Center is programmed for 2024 at $12,950,000, but would be contingent on securing outside funding sources.

A final 2023-2027 CIP will be prepared after receiving council input and direction. The goal is to have it officially adopted in September.