HomeMy WebLinkAbout3. Proposed CIP 2013-2017 07/10/2012Village of Mount Prospect
Mount Prospect, Illinois
INTEROFFICE MEMORANDUM
TO: VILLAGE BOARD AND FINANCE COMMISSION
FROM: FINANCE DIRECTOR
DATE: JUNE 22, 2012
SUBJECT: PROPOSED CIP: 2013 -2017
Attached hereto is the proposed 2013 -2017 Capital Improvements Plan (CIP). The projects
being considered for the year 2013 total $11,531,457. The five -year total for all projects is
$63,283,443.
We encourage you to read the Manager's transmittal letter beginning on page ii. This
correspondence describes the purpose of the CIP, highlights some of the more significant
projects, and reviews project funding. To help you evaluate our ability to fund the requested
projects a five -year financial forecast is provided for the major operating and capital project
funds that support funding for the CIP. These forecasts can be found in Tab 9 of the
document.
In general, the projects being presented directly relate to the monies expected to be
available. However, from reviewing the CIP requests in conjunction with the five -year
financial forecasts I would like to direct your attention to several project areas.
General Fund
The CIP is showing the five -year average of projects being paid from General Fund
revenues as $523,000 (A -10). This is typical of the amount of capital projects funded by the
General Fund on an annual basis. I would like to point out the five -year financial forecast for
the General Fund. This forecast is showing an operating deficit in 2013 of $805,000 with
annual deficits increasing each subsequent year through 2017 ($2.2 million). Based on this
information it is likely that many non - critical projects will be deferred. See the complete five -
year forecast for the General Fund beginning on page 1 of Tab 9.
Motor Fuel Tax Fund (MFT)
Receipts from motor fuel taxes beginning in 2013 are expected to be flat through 2017. Due
to this lack of growth in revenue, the street resurfacing program for 2013 was scaled back.
Spending on street resurfacing for 2013 is $1,115,000, down from the $1.5 million originally
proposed. The programs for 2009 -2012 were also been scaled back to the level of available
funds. The street improvement budget for 2014 -2017 still reflect full program costs. These
project years will also need to be scaled back if revenues cannot support the higher levels.
Proposed CIP
June 22, 2012
Page 2 of 3
Capital Improvement Fund
The Capital Improvement Fund is meant to support intermediate sized capital expenditures
for various departments that are non - recurring in nature. Some examples of these projects
are Detention Pond Improvements, Emergency Generators and public building
improvements. Supported by a one - quarter cent home rule sales tax, there is approximately
$1.0 million annually available for these types of capital projects. Projects included in the
five -year plan after 2013 will need to be further prioritized with some deferrals to bring the
total annual amount down to what can be supported with current revenue streams.
Street Improvement Construction Fund Projects
The forecast for the Street Improvement Fund (page 11) is showing a positive fund balance
at the end of 2013, but the fund balance will become a significant deficit by the end of 2014
due to stagnant revenues. Revenue to support the program comes from the state and local
motor fuel tax and one - quarter cent home rule sales tax. Each of these revenue sources is
expected to either show minimal or no growth over the next several years resulting in fewer
funds available to fund the street program. Adjustments to the amount of work planned
each year will be necessary if these revenue sources do not rebound during 2013. The
street resurfacing program supported by this fund was reduced from $2.5 million to $1.2
million in order to maintain an adequate level of fund balance.
Flood Control Construction Fund Protects
Major projects in this fund resumed in 2011 when funding from the home rule sales tax
became available. Previously, the tax was allocated to support debt service from earlier
flood control projects. Beginning in 2011, approximately one -half of the tax is freed up to
fund various projects. Prospect Meadows storm sewer and ditch improvements
($1,000,000) is scheduled for 2011 -2013. In addition, the Hatlen Heights storm sewer
project is slotted to begin in 2015 and is expected to cost $1.9 million. It is anticipated that
there will be sufficient funds on hand by that time to begin the project. Funding levels
anticipated in 2016 do not support the McDonald Creek project and may have to be
deferred. See the complete five -year forecast for the Flood Control Construction Fund
beginning on page 12 of Tab 9.
Water and Sewer Fund
There are several large capital projects included in the CIP for 2013 -2017. The first is the
ongoing Combined Sewer Improvement project started in 2006. The total cost for the
project was originally estimated at $15 million and expected to take 10 years to complete.
Funding for this project comes from a $5 per month sewer construction fee and basic sewer
usage fee. Based on early results, overall pricing is coming in lower than originally
estimated and completion will likely occur before the planned 10 years. Other major
projects planned to start in 2013 include water tank rehabs totaling $775,000 and
Residential AMR System totaling $2.3 million.
H :WCCT\CIP \CIP 2013 - 2017\2013 -2017 CIP - Board Memo June 2012.docx
Proposed CIP
June 22, 2012
Page 3 of 3
Funding to be Determined
The CIP is showing two projects where funding has yet to be determined. These projects
include the Ash Removal and Ash Replacement programs.
Meetings to review the CIP are scheduled for June 28 (Finance Commission) and July 10
(Village Board). Staff looks forward to discussing the project submittals and their impact to
operations.
David O. Erb
Finance Director
Copy: Michael E. Janonis, Village Manager
Dave Strahl, Assistant Village Manager
Lynn Jarog, Deputy Finance Director
Department Directors
H:\ACCT\CIP \CIP 2013 - 2017\2013 -2017 CIP - Board Memo June 2012.docx