Council shows concern for CIP budget

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Early July marked the beginning of the 2018 budget season according to city administrator Shane Fineran. The city kicked it off with their first review of the Capital Improvement Plan or CIP.

A CIP is a short-range plan, in Watertown’s case ranging from 2017 to 2026. It identifies capital projects and equipment purchases, as well as provides a planning schedule and lays out different sources of income. Fineran said the plan should be close to finalized around the end of September.

The 1999 Sterling dump truck and plow the city is considering improving. Maintenance costs would be around $50k. (Submitted photos)

There are several highlights of the CIP. One is the improvement to a 1999 sterling Dump Truck with a plow. The maintenance on the estimated $25,000 truck will cost about $50,000. Other large projects are street mill and overlays for the next nine years, the urbanization of Highway 25 at $2.2 million, almost $319,000 in playgrounds over the next five years and $176,000 into Evergreen Park through various projects. Those projects are not included in the Park Capital Fund.

Fineran said this plan is based on a budget structure that is primarily cash based. He also mentions that this plan accounts for 3 percent inflation in future years.

“This plan changes, the gaps change – right now we’re just showing cash or primarily grant type sources,” he said.

The urbanization of Highway 25 is a potential project to coincide with planned maintenance efforts by the Minnesota Department of Transportation (MNDOT) according to staff. The plan includes curb, gutter, storm water collection, grade separation and turn lanes. Staff says there are multiple funding sources possible for the $2.2 million project. The urbanization is planned to start in 2020 and would be complemented by a $147 thousand White Trail connection to downtown alongside the highway.

After almost half an hour of briefing the counselors had some concerns.

“I don’t know how that’s going to improve our cities transportations system,” Mayor Steve Washburn said. “I think we have other transportation needs that are of higher priority.”

There are four parts to the CIP: Capital Improvements Fund, Fire Capital Fund, Parks Capital Fund and the Utilities Capital Fund. Each section lists revenues and sources, followed by expenditures.

“Yes there are other funding sources and things we can do but what happens if that funding does not go through and we can’t get funds – then what do we do,” said councilmen Adam Pawelk.

Pawelk noted that the utilities fund goes up and down in the next several years. He said the fire fund stays pretty healthy until a million dollar purchase of a ladder truck in 2022. Though there were a few other things that stuck out to him as well.

“You start looking at the ending fund balance of these in the next two to three years and they’re all pretty much in the red,” he said.

According to the Capital Improvement Fund spreadsheet the fund balance will be $50,000 in debt by 2019 and $1.5 million by the year after.

Council Member Michael Walters was concerned with the park fund and the projects planned for the year 2020. There are over a million dollars in improvements planned which would send the fund over $800,000 into the red.

“My question is how did those get put on in the year 2020, I’m sure those will take more conversation to prioritize those,” Walters said. “Maybe it should take eight to ten years.”

“I’m a little uneasy with a lot of the things that are listed, I don’t mind making one big ticket purchase a year but I don’t like making two,” Washburn said.

An example he brought up was the $225,000 planned for a parking lot at Evergreen Park. Walters said he thinks there is plenty of parking there.

“It’s not my intention to bring plans to you that are completely unrealistic, it’s more to try and spur conversation,” Fineran said.

Fineran said the council needs to think about what their plans and strategy are going forward. He encouraged them to think about issuing debt, saying then the conversations could be very different.

Councilor Lindsay Guetzkow asked if the council could see numbers back to 2015.She said it would be helpful to look at the numbers and see what sort of projects the city has postponed and projects have come up.
Washburn reminded staff and the council that is the first draft and they have many more conversations to come.

“This is conversation one and that’s typically how they go,” he said.

To view the CIP go to Watertown City Council agendas/meetings on the city website or visit the link