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Home My WebLink About32. Discuss Increasing the Amount of Debt Issuance TO: Honorable Mayor and Members of the Common Council FROM: Russ Van Gompel, Director of Finance DATE: April 21, 2022 RE: Discuss increasing the amount of Debt Issuance to cover the 2023 CIP Projects BACKGROUND At the April 12, 2022 City Council meeting, a question was raised to increase the debt issuance in 2022 to cover the 2023 CIP Projects. To assist with the discussion, I have included a list of 2022 CIP projects which are proposed to be issued for General Obligation Bonds and Notes, including the projected payback terms. After the action taken by the City Council on April 12, 2022 the total general obligation projects totaled $22,950,900. Also attached is a list of 2023 Capital Improvement Projects which are proposed to be financed with the issuance of debt. The total for this list is $18,934,380. Previously the City Council provided direction that it would like to return to the goal of issuing no more than $15,000,000 in new general obligation debt. I have divided the list into four categories; Street Projects, Ongoing Allowances, Major Equipment, and projects that could have future consideration on the issuance of debt. At this time, the City Manager and I would like the City Council to consider adding $7,300,500 to the debt issuance in 2022. The remaining projects ($11,633,880), shown as Category D, will need additional discussions and the City Council will need to provide subsequent guidance to staff. The $7,300,500 in projects identified in Category A, B, and C are projects that are regularly included in an annual CIP, and can be expected to be fully spent in a timely fashion in order to comply with Federal arbitrage regulations. ANALYSIS If the Council agrees to add $7,300,500 of 2023 CIP Projects to the 2022 borrowing, and the Council desires to return to a debt limit for CIP projects to $15,000,000, the Council would still have the ability to finance $7,699,500 for 2023 projects ($15,000,000 - $7,300,500). Thus not all of the projects list in Category D could be included in a future debt issuance in 2023. As part of the planning process for the 2023 CIP, additional discussion could occur with the final size of the remaining projects and which projects could reasonably be expected to occur in 2023. FISCAL IMPACT The impact on our general obligation debt limits and ratios was based upon the proposed issuance of $15,000,000. If another amount was decided for 2023, our debt ratios and other metrics will have to be updated. With a continued increase in our equalized value, our debt ratio can be expected to decrease even if the $15,000,000 debt limit was exceeded. Staff can provide that analysis if needed. RECOMMENDATION Staff recommends that Council add $7,300,500 to the size of the 2022 debt issuance to be used for the projects listed in Categories A, B, and C. Approved, Mark A. Rohloff City Manager 2022 Project Cost 20 Year Level Payment 20 Year Level Payment 20 Year Level Payment 10 Year Level Payment 3 Year Level Payment GENERAL PROJECTS UI: Algoma Boulevard Reconstruction 3,437,500 3,437,500 PARKS: New Building Construction 8,700,000 7,233,000 1,467,000 UI: East 9th Avenue Reconstruction 1,601,500 1,601,500 UI: Rosalia Street Reconstruction 1,338,600 1,338,600 UI: East Lincoln Avenue Reconstruction 970,600 970,600 FIRE: Replace Ambulances 927,000 927,000 PRKG: Parking Lot Improvements 500,000 500,000 FAC: HVAC/Roofing Replacement Program 500,000 500,000 UI: Sidewalk Rehabilitation & Reconstruction Prog 300,000 300,000 STR: #54 and #20, Hook Lift Truck 247,000 247,000 UI: Vine Avenue Reconstruction 220,600 220,600 STR: Replace Tandem-Axle Plow Trucks 220,000 220,000 STR: #104, Concrete Breaker 170,000 170,000 STR: #106, Rubber-Tire Backhoe 150,000 150,000 STR: #24, Flat Bed Truck 145,000 145,000 FRSTRY: Replace #481, Aerial Lift Truck w/cabinets 127,000 127,000 LIB: Elevator Modernization Upgrades 115,500 115,500 PARKS: Menominee Park Zoo Improvements 100,000 100,000 LIB: Fire Alarm System 71,100 71,100 STR: Replace Sidewalk Tractors 70,000 70,000 CEM: Replace 1 Ton Dump Trucks w/snow plows 69,000 69,000 FRSTRY: Replace #471, Chipper 69,000 69,000 PARKS: Replace Zero Turn Tractors 66,500 66,500 ELEC: Replace #502, Electric Div Service Pickup 63,000 63,000 CG: New Pickup Truck with Liftgate 50,000 50,000 PARKS: Replace #418,3/4Tn PKUP lft gte & fuel tnks 43,000 43,000 SAN: #201, 1/2-Ton Supervisor's Pickup Truck 34,000 34,000 PARKS: Westhaven Circle Park Lighting Replacement 30,000 30,000 PARKS: Park Trails Improvements 25,000 25,000 STR: Replace Trailers 10,000 10,000 STR: #256, Rock Drill 10,000 10,000 SAN: Replace Automated Side-Load Refuse Trucks 300,000 300,000 Menominee Road Reconstruction 1,000,000 1,000,000 Parking Lot Improvements 250,000 250,000 Bradley Street Paving 220,000 220,000 Design Pioneer Riverwalk 300,000 300,000 HVAC/Roofing 250,000 250,000 Lakeshore 250,000 250,000 SUBTOTAL 22,950,900 9,088,800 7,233,000 455,000 5,874,100 300,000 G.O. Notes G.O. Bonds Parks & Public Grounds (Tax Levy) General Projects (Tax Levy) Sanitary Trucks (Tax Levy) Street Improvements (Tax Levy) Building for the Housing of Machinery and Equipment (Tax Levy) Project # Priority Amount Category A: Street Projects UI: S Washburn St Asphalt Const/W 20th 22-14 S WASH n/a 117,600$ UI: S Washburn St Asphalt Const-W Waukau 22-15 S WASH n/a 366,000$ UI: Osborn Avenue Asphalt Const 22-16 OSBORN n/a 122,600$ UI: Grand Street Reconstruction 23 GRAND ST n/a 553,100$ UI: McKinley Street Reconstruction 23 MCKINLEY n/a 247,900$ UI: Tyler Avenue Reconstruction 23 TYLER AVE n/a 822,200$ UI: West Lincoln Avenue Reconstruction 23 W LINCOLN n/a 1,061,900$ UI: Wisconsin Street Reconstruction 23 WISC ST n/a 1,192,700$ 4,484,000$ Category B: Ongoing Allowances FAC: HVAC/Roofing Replacement Program 00A HVAC/RF 1 500,000$ PRKG: Parking Lot Improvements 00A PRKG LOT 2 500,000$ 1,000,000$ Category C: Major Equipment Replacement STR: Replace Tandem-Axle Plow Trucks 22 STR VEH01 1 425,000$ SAN: Replace Rear-Load Refuse Trucks 23 SANI VEH1 1 205,000$ STR: #260, Crack Filler 23 STR EQP1 1 48,000$ STR: #163, Asphalt Roller 23 STR EQP2 1 55,000$ STR: Replace Articulated Loaders 23 STR EQP3 1 300,000$ STR: Replace Single-Axle Trucks 23 STR VEH02 1 582,000$ STR: #34, 1-Ton 4WD Crew Cab Pickup Truck 23 STR VEH03 1 42,000$ STR: Replace Semi-Tractors 23 STR VEH05 1 120,000$ STR: #32, 3/4-Ton 4WD Pickup Truck 23 STR VEH1 1 39,500$ 1,816,500$ Potential 2022 Borrowing 7,300,500$ Category D: Future Financing Considerations PARKS: Park Trails Improvements 00A PRK TRLS 3 25,000$ PLNG: South Main Acquisition 21 S MAIN AQ 1 250,000$ UI: Sidewalk Rehabilitation & Reconstruction Prog 21-06A REHAB n/a 300,000$ CEM: Replace 1 Ton Dump Trucks w/snow plows 22 CEM VEH1 3 69,000$ PARKS: Lakeshore Park Development 22 LAKESHORE 3 669,400$ LIB: Elevator Modernization Upgrades 22 LIB ELEVS 3 105,100$ PARKS: Replace Zero Turn Tractors 22 PRKS EQP1 2 69,500$ TIF: TIF38 Riverwalk on Pioneer Island 22 TIF38 ISL 3 2,000,000$ PARKS: 44th Parallel Park Play Equip & Surfacing 23 44P EQUIP 3 230,000$ UI: Arthur Avenue Reconstruction 23 ARTHUR n/a 618,600$ UI: Bauman Street Reconstruction 23 BAUMAN ST n/a 56,000$ MUSM: Replace Security Camera Systems 23 CAMERAS 2 85,000$ CEM: Replace #499, SIDEWALK TRACTOR 23 CEM EQUP1 3 31,500$ CEM: Replace #493, 3/4Tn PKUP w/fuel tanks & gte 23 CEM VEH1 3 49,000$ MUSM: Creation of Access Doors 23 DBL DOORS 3 75,000$ UI: Mockingbird Way Traffic Calming 23 MOCKBIRD n/a 90,000$ PARKS: Menominee Prk Prkg Lot & Reetz Flds -Design 23 MP LOT DS 3 350,000$ PARKS: Replace #443, Tracked Skidsteer 23 PRKS EQP1 2 65,000$ PARKS: Park Shop Riding Sweeper/Vacuum 23 PRKS EQP2 2 80,000$ PARKS: Replace 1 Ton Pickup Trucks 23 PRKS VEH1 2 44,000$ PARKS: Roe Park Play Equipment Replacement 23 ROE EQUIP 2 150,000$ PARKS: Rusch Park Development 23 RUSCH DEV 3 200,000$ PLNG: Former Sanitation Garage Demo 23 SANI DEMO 3 200,000$ PARKS: Teichmiller Park Tennis Court Reconstruct 23 TEIC TNIS 3 100,000$ TIF: TIF38 Rvrwlk E of RR-Pioneer Dr incl S Brkwtr 23 TIF38RVRW 2 1,000,000$ FIRE: Fire Training Center 23 TRNG CTR 3 3,798,780$ ELEC: Traffic Signal Westhaven Dr & 9th Avenue 23 TRSIGNAL1 3 175,000$ ELEC: Replace #500, Electrical Supervisor Pickup 23 VEH ELEC1 3 48,000$ PARKS: Westhaven Circle Prk Tennis Crt Reconstuct 23 WHCRL TNS 3 100,000$ PARKS: Site A Development - Ripple & Oregon 23SITE A DEV 3 300,000$ PARKS: Site B Development - 9th and Clairville 23SITE B DEV 3 300,000$ 11,633,880$ 18,934,380$ 2023 Capital Improvement Debt Projects