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 2024 projects will then be added to the 2024 budget for final approval in December.  All future year's projects (2025 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 a 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.

Last year, staff added a 20-year Equipment Replacement Schedule as an additional appendix in the CIP book.  The equipment list encompasses all city equipment (excluding utility funds), their estimated lives and scheduled replacement cost.  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.

Park Development Fund

• The Park Development fund includes 14 projects for 2024 totaling $11.6 million, including Riverfront Marina, Trail Wayfinding and Amenities, Lions Park renovation, Quarry Lake Park, West End Dog Park, Scenic Heights, Killarney Hills Park, Windermere Bluff Regional, Riverbank Stabilization, Cultural Corridor, Valley Crest, Park Meadows Trail, County Road 78 Underpass, and Highview Park.
• Park Dedication fees remain the primary source of funds.  The City received $3.3 million in park dedication fees in 2022 and anticipates $2.8 million for the current year. 

• The Riverbank Stabilization project of $16.5 million is included in the five year plan.  The City has been awarded $8.26 million in State bonding and $3.5 million in Federal funding for these improvements and continues to seek additional funding opportunities.  The City share will come from park development,  sewer and storm drainage utility funds,

• The Cultural Corridor project of $2.2 million is included in 2024.  The City has been awarded $750,000 of Federal Community Project Funds and the remainder will come from park development funds.

• Riverfront Marina project of $2.8 million has been included in the plan and is proposed to be completed in phases 1) rehabilitation of the Livery and Schroeder House and parking, 2) historical markers under the Cultural Trail program, 3) riverbank stabilization under the larger riverbank project and 4) additional docks and trails which have been allocated $350,000 of state funding.

• Parks will only be completed if funding is available and sufficient.  As an example, Highview Park is contingent upon park dedication fees of nearby development.
  
  

Capital Improvement Fund

• The plan identifies over $50.2 million in CIF projects including overlays and reconstruction projects for 2024-2028.  Recurring funding sources include tax levy, franchise fees, special assessments, municipal state aid and special assessments.  Recurring funding has not kept pace with increasing street improvement costs.
• A portion of the Downtown ADA, Lighting and Tree Rehab project of $4.4 million is currently programmed for 2024 and the remainder in 2025.  This assumes the project can be broken into sections without reducing efficiency.  A project design would need to be completed to identify estimated costs and scope and review prioritization.
• Based on the amount of current programmed projects, a bond issue appears to be needed for 2025 that would pay for street improvements.  The current cash flow projections deficit is $4.9 million in 2025 and $9.1 million in 2026.  This will change if additional funding sources are identified, project timing changes or project scope changes.  If a 2025 bond is issued, it is anticipated it would cover 2025 and 2026 needs.
  
  

Equipment Replacement Internal Service Fund

• A number of pieces of new equipment and existing equipment have been added to various years on the equipment replacement schedule.  This will allow the city to begin accumulating funds for future replacement costs.  These have been identified on the equipment replacement schedule as (New).

• Generally, equipment and vehicles costs have seen a ten percent increase from last CIP’s amounts.  This increase, along with added equipment calculate to a $197k increase in annual rent costs.
  
  

Building Internal Service Fund

• Current year cash flow projections include SandVenture improvements.  Bids for the construction still need City Council approval.  The funding for the improvements will come from a combination of accumulated building funds, Local Project Funds and interfund loans.
• The Innovation Center is programmed for 2024/2025 at $13 million, but would be contingent on securing outside funding sources.
• The Fire Station #1 remodel has been reduced in scope from $3 million to $800,000, which will cover the cost of remodeling the dorm area of the building.  Funding would be provided from one-time state public safety funding.
  
  

A final 2024-2028 CIP will be prepared after receiving council input and direction.  The goal is to have it officially adopted in September.