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Home My WebLink About1. Proposed CIP: 2014-2018 MemorandumVillage of Mount Prospect Mount Prospect, Illinois INTEROFFICE MEMORANDUM TO: VILLAGE BOARD AND FINANCE COMMISSION FROM: FINANCE DIRECTOR DATE: JULY 2, 2013 SUBJECT: PROPOSED CIP: 2014 -2018 Attached hereto is the proposed 2014 -2018 Capital Improvements Plan (CIP). The projects being considered for the year 2014 total $9,741,845. The five -year total for all projects is $56,860,811. We encourage you to read the Assistant Village 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 $799,000 (A -10). This is higher than in past years due to the resumption of the Sidewalk Program and a new national mandate for storm sewer inspections. The five -year financial forecast for the General Fund is showing an operating deficit in 2014 of $160,000 with annual deficits increasing each subsequent year through 2018 ($1.8 million). Based on this information it is likely that non- critical projects may need to be deferred. See a complete five -year forecast for the General Fund and all other major capital Funds beginning on page H -1 of Tab 9. Motor Fuel Tax Fund (MFT) Receipts from motor fuel taxes beginning with projections for 2014 are expected to be flat through 2018. Due to this lack of growth in revenue, the street resurfacing program for 2014 was scaled back. Spending on street resurfacing for 2014 is $860,000, down from the $1.4 million originally proposed. The programs for 2009 -2013 were also been scaled back to the level of available funds. The street improvement budget for 2015 -2018 still reflect full program costs. These project years will also need to be scaled back if an additional revenue source cannot be identified to support the higher levels. 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 $1.2 million annually available for these types of capital projects. Projects included in the five -year plan after 2014 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. Proposed CIP July 2, 2013 Page 2 of 2 Street Improvement Construction Fund Projects The forecast for the Street Improvement Fund is showing a positive fund balance at the end of 2014, but the fund balance will become a significant deficit by the end of 2015 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 2014. The street resurfacing program supported by this fund was reduced from $2.6 million to $1.6 million in order to maintain an adequate level of fund balance. Flood Control Construction Fund Projects 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 was freed up to fund various projects. Prospect Meadows storm sewer and ditch improvements ($1,000,000) is scheduled for 2011 -2014. In addition, the McDonald Creek project is slotted to begin in 2016 and is expected to cost $1.5 million. It is anticipated that there will be sufficient funds on hand by that time to begin the project. Water and Sewer Fund There are several large capital projects included in the CIP for 2014 -2018. 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 continue in 2014 is the implementation of a residential AMR System at $500,000 and sewer main repairs /replacement at $375,000. A joint workshop with the Village Board and Finance Commission to review the CIP is scheduled for July 9. Staff will be on hand to discuss project submittals and their impact on operations. David O. Erb Finance Director Copy: Michael E. Janonis, Village Manager Dave Strahl, Assistant Village Manager Lynn Jarog, Deputy Finance Director Department Directors C: \Documents and Settings \djarosz \Local Settings \Temporary Internet Files\ Content .Outlook \W7C5BMPD\2014 -2018 CIP - Board Memo June 2013.docx