HomeMy WebLinkAbout1998-01-19 Council Packet - Work SessionKenai
City
Council
Work Session
January 19, 1998
Equipment Replacement Fund
KENAI CITY COUNCIL
WORK SESSION
MONDAY, JANUARY 19, 1998
KENAI CITY COUNCIL CHAMBERS
6:30 P.M.
Attached is the following information:
le
1 / 15/98 RAR memorandum
e
Budget Projection - General Fund
e
Ordinance No. 1770-98, Establishing an Equipment Replacement Fund.
e
Ordinance No. 1771-98, Appropriating $1,500,000 in the General Fund
to be Transferred to the Equipment Replacement Fund.
o
12/30/97 RAR memorandum regarding Building Maintenance Schedule.
CITY OF KENA!
210 FIDALGO AVE., SUITE 200 KENAI, ALASKA 99611-7794
TELEPHONE 907-283-7535
FAX 907-283-3014 ~
1992
M emoratnClllm
Date'
To'
From:
January 15, 1998
Mayor and City Council
Richard A. Ross, City Manager
Work Session - January 19, 1998
At the Work Session on January 19, 1998 the Administration is requesting that
the Council address the following subjects:
,
Finance Director Semmens will give an update on the projected
revenues and expenditures in the current FY98 budget.
,
The Equipment Replacement Fund Ordinance up for Council
consideration on January 21, 1998 will be reviewed. This will
include discussion of the fund, its operation and fiscal impacts, as
well as any questions on the schedule itself.
,
The building maintenance schedule will be reviewed and Council
input received.
.
We need to identify the site(s) for the Challenger Learning Center.
The narrowing of site possibilities' is necessary prior to development
of an RFP. At this time we should consider the location of the future
public health facility also.
RAR/kh
TOTAL ASSESSED VALUE
MILL RATE
REVENUE
Property Tax-
Sales Tax
Actual
FY 94-95
BUDGET PROJECTION -GENERAL FUND
Original
Actual Actual Budget
FY 95-96 FY 96-97 FY 97-98
Budget at
12/31/97
Projection
FY 97-98
308,891,000 310,704,620 320,197,601 328,300,000 328,300,000 327,643,000
3.50
3.50
3.50. 3.50 3.50
3.50
1,152,887 1,167,151 1,162,~833 1,205,950 1,205,950 1,200,000
3,306,262 3,350,333 3,360,713 3,400,000 3,400,000 3,400,000
State Revenue:
Revenue Sharing 659,511 623,854 201,103 192,100 192,100 188,880
Safe Communitiesand Muni. Asst. 364,616 342,700 342,700 341,800
Fish Tax 178,646 98,736 167,845 162,500 162,500 162,500
Other 89,030 83,527 83,541 54,500 66,687 78,340
Total State Revenue 927,187 806,117 817,105 751,800 763,987 ~771,520
Other Revenue:
Hotel Motel Tax 82,839 107,914 ....
Licenses and Permits 45,054 57,638 34,435 37,400 37,400 40,000
Ambulance Fees 94,493 82,585 80,000 80,000 90,000
Interest 699,799 762,663 810,720 775,000 775,000 735,000
Other 371,572 380,943 260,577 279,300 281,537 274,500
Total Other Revenue 1,199,264 1,403,651 1,188,317 1,171,700 1,173,937 1,139,500
Total Revenue 6,585,600 6,727,252 6,528,968 6,529,450 6,543,874 6,511,020
Transfers From Other Funds
Charges to other funds 298,000 709,000 719,006 835,000 835,000 835,000
Capital Projects 994
Enterprise 65,338 44,372 36,435 7,764 7,764 7,764
Trust Fund 70,288 69,328 41,591 28,000 28,000 28,000
Total Transfers 434,620 822,700 797,032 870,764 870,764 870,764
TOTAL REVENUES AND TRANSFER,?.c
7,020,220 7,549,952 7,326,000 7,400,214 7,414,638 7,381,784
EXPENDITURES/APPROPRIATIONS
General Government 1,788,920 1,878,549 1,569,854 1,815,412 1,859,834 1,692,449
Public Safety 3,099,719 3,099,077 3,260,762 3,334,150 3,362,822 3,228,309
Public Works 1,336,847 1,745,986 1,420,506 1,633,328 1,812,104 1,649,015
Parks, Rec. & Cultural 856,815 975,550 1,057,857 996,149 1,026,235 944,136
Total Expenditures 7,082,301 7,699,162 7,308,979 7,779,039 8,060,995 7,513,909
Appmp. of Fund Balance
Beginning Fund Balance
Fund Balance Adjustment
Transfer to Equip. Fund
Residual Equity Transfer
(62,081) (149,210) 17,021 (378,825) (646,357) (132,125)
10,414,744 11,208,163 11,058,953 10,640,750 11,075,974 11,075,974
767,500
88,000
15,233
15,233
(1,500,000)
15,233
8,054,689 8,129,643 7,277,15~8 7,444,850 6,980,539
Unres. Undesignated Fund Balance
7,640,612
,, ,
Ending Fund Balance 11,208,163 11,058,953 11,075,974 10,277,158 10,444,850 9,459,082
Encumbrances (142,036) (200,413) (267,531) (200,000) (200,000) (225,000)
Reserves and Designations (3,425,515) (2,803,851) (2,678,800) (3,000,000) (3,000,000) (2,253,543)
CITY OF KENAI
Suggested by: Administration
ORDINANCE NO. 1770-98
AN ORDINANCE OF THE COUNCIL OF THE CITY
ESTABLISHING AN EQUIPMENT REPLACEMENT FUND.
OF KENAI,
ALASKA
WHEREAS, the City owns a fleet of heavy equipment; and
WHEREAS, the City administration keeps a schedule of replacement dates for each piece of
equipment; and
WHEREAS, an Equipment Replacement Fund would provide the financing mechanism for
such replacements; and
WHEREAS, the Equipment Replacement Fund would eliminate large spikes in the General
Fund budget; and
WHEREAS, the capitalization of the Equipment Replacement Fund will come from General
Fund reserve for equipment replacement and from other appropriations.
NOW, THEREFORE, BE IT ORDAINED by the Council of the City of Kenai, Alaska that
KMC 7.25.110 is enacted as follows:
(1) A fund entitled Equipment Replacement Fund is hereby
created. The fund shall be an internal service fund as defined by generally
accepted accounting principles. The purpose of the fund is to provide
financing for heavy equipment which is anticipated to cost in excess of
$50,000 and which would otherwise be financed by the General Fund.
(2) The Equipment Replacement Fund is not required to have
an annual budget; however, any cash outlay for equipment purchases
from the Equipment Replacement Fund shall be approved by resolution
of the City Council.
(3) The Equipment Replacement Fund shall be allocated
interest earnings on all cash balances in the fund. Proceeds from the sale
of surplus heavy equipment will be deposited in the Equipment
Replacement Fund if the fund will be financing the replacement of the
equipment, or i~ the equipment was purchased with fund assets. Any
transfer of Equipment Replacement Fund assets to another fund shall be
accomplished by ordinance.
Ordinance No. 1770-98
Page 2 of 2
(4) The City Manager will maintain a schedule of all
equipment owned by the Equipment Replacement Fund and shall make
recommendations to the City Council when equipment is to be
purchased by the fund.
PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, the
January, 1998.
day of
John J. Williams, Mayor
ATTEST:
Carol L. Freas, City Clerk
Approved by Finance'
Introduced:
Adopted:
Effective:
January 7, 1998
January 21, 1998
February 21, 1998
December 22, 1997 (sp)
Purchases
Dept. YEAR DESCRIPTION ' . Rep. Year Rep:' Cost
Fire 1971 SEAGRAVES ENGINE 1998 285,000
Streets 1993 ELGIN SWEEPER (FROM AIRPORT) ' 1998 . 50,000
1998 Total 335,000
Fire 1980 '~~:~.'; '~:": 4WD~~~' .............. ;-~'~ .... ~";~'~'~'~'~','~, ,~~'~?~ ........ ~::~ 2002 85,000
Struts' 1972 CAT ~ C RUBBER TIRE LOADER 2002 260,000
' ' ~~;~! 2002 119,000
, , ,
2~2 Toal ~,~0
Struts 1981 ' GMC 10- 12 YARD DUMP TRucK ' , '2003 121,~0
.... 2~3 Total 121,000
, :_~.~~.:....~..,:~. " 20~ 105,000
Fire 1988 ..
Struts' ' 1982 GMC SANDER 20~ 120,000
, , ,, ,
Streets 1983 FORD F~TBED 20~ 60,000
, , , ,
2~ Total 285,000
Str~{s' 1983 ' ATHEY MOBILE SWEEPER ' 2005 100,000
, , ,i ,
Struts' ' 1978' CAT 14G MOTOR G~DER W~ING 2005~ ~0,000
Str~ 1983 BUCKET TRUCK 2005~, 60,000
, , , ,
.... 2~5 Total 380~000,
Struts 19~ ",~.ER SN~~ ~'~:~; 20~ 110,000
' 2~ To~l 110,000
Struts 1987 CAT IT-28 LOADE~INTEG~L TOOL CARRIER 2~7 140,000
' ' ' 2~7 To~l 140,000
Fire ' 1983 SPARTAN' pUMPER ' 2009 262,500
Struts 1991 WHITEGMC SANDER 2009 190,000
, , , , ,
~ To~I 452,500
Struts 1988 CAT ~C RUBBER TIRE'LOADER 2010 3~,000
, , , ,, ,,
~10 To~I 300,000
,
Fire 1997 FREIGHTLINER AMBU~NCE 2013 127,500
Streets 1988 CAT 120G MOTOR G~DER W~ING, pLOW 2013 290,000
, ,
2013 To~I 417,5~
Struts 1993 CAT 14~ MOTOR G~DER W~ING & V-PLOW 2018~ 325,000
Struts 1993 ELGIN SWEEPER 2018 215,000
' ' 2o~8 T°a~ ~0,000
,
Fire 1995 ENGINE 3 2021 375,,000
Streets 19~ CAT 160H MOTOR G~DER W~ING & V-PLOW 2021 ~,000
2~1 Total 721,000
, ,,
Fire 1993 HURRICANE AERIAL' , . 2024 562,500,
2024 Total 562,500
Grand Total 4,828,500
Fire Dept. equipment figures assume 25% grant funding.
Equipment highlighted above is scheduled to be replaced twice during this period of time. The
cash flow schedule reflects the additional cost of these replacements in 2016, 2020, & 2024.
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CITY OF KENA!
210 FIDALGO AVE., SUITE 200 KENAI, ALASKA 99611-7794
TELEPHONE 907-283-7535
FAX 907-283-3014 ~
1992
MEMORANDUM
TO:
FROM'
City of Kenai Mayor and Council
Larry Semmens, Finance Director
THRU'
Rick Ross, City Manager
DATE'
December 31, 1997
SUBJ'
Equipment Replacement Fund
Ordinances 1770-98 and 1771-98 establish and capitalize the equipment
replacement fund. The purpose of the fund is to provide financing for
replacement of General Fund equipment expected to cost in excess of $50,000.
Currently there are 23 pieces of equipment that meet this criteria.
One of the benefits of this approach to financing equipment is that the General
Fund will not have large variations in expenditures due to equipment purchases.
The up front capitalization of the fund will reduce fund balance in the General
Fund this year, but in future years there will not be large expenditures in the
General Fund for equipment. The plan is to have the General Fund make
payments to the Equipment Replacement Fund over the expected life of the new
equipment purchased. These payments, along with interest earnings and
proceeds of surplus equipment sales, will provide financing for replacement
equipment when the time comes. The estimates of replacement cost were
derived by applying a 3% inflation rate to current costs of equipment. The
interest rate used is 5.25%.
The schedule titled 'Purchases' provides the anticipated year that individual
equipment items will be replaced and the estimated cost of replacement. For fire
emergency apparatus we are expecting that 25% of the cost will come from
grants. Therefore, the numbers on the schedule are the cost to the fund, which
is 75% of total cost.
Equipment Replacement Fund Memorandum, page 2
The Cash Flow Schedule provides the details of cash in and out over the next 26
years. The cash out is for purchases of equipment and the cash in is from
payments, surplus sales and interest. The schedule indicates that there will be a
modest cash balance in the year 2024 which is at the end of the first round of
equipment replacement. The actual cash balance at that time will depend on a
number of variables. I believe the fund will be adequately capitalized throughout
the period. As long as payments are made according to the plan, the fund will
likely have sufficient resources available to finance equipment purchases for a
much longer period.
This fund will be an internal service fund which is accounted for like a business.
Therefore the only expense that will be recorded in the fund is depreciation
expense. This fact makes it unnecessary to adopt an annual budget. Control
over equipment purchases will be maintained by the requirement to pass a
council resolution for all purchases.
Please feel free to call me if you have any questions on the equipment
replacement fund.
CITY OF KENAI
Suggested by: Administration
ORDINANCE NO. 1771-98
AN ORDINANCE OF THE COUNCIL OF THE CITY OF KENAI, ALASKA
APPROPRIATING $1,500,000 IN THE GENERAL FUND TO BE TRANSFER~D TO
THE EQUIPMENT REPLACEMENT FUND.
WHEREAS, the City owns a fleet of heavy equipment; and
WHEREAS, the City administration keeps a schedule of replacement dates for each piece of
equipment; and
WHEREAS, an Equipment Replacement Fund has been created to provide the financing
mechanism for such replacements; and
WHEREAS, the $1,500,000 for capitalization of the Equipment Replacement Fund is
available in the General Fund reserve for equipment replacement and in unreserved
undesignated fund balance.
NOW, THEREFORE, BE IT ORDAINED by the Council of the City of Kenai, Alaska as
follows:
Section 1: The $568,686 balance of the General Fund reserve for
equipment replacement is appropriated and transferred to the Equipment
Replacement Fund.
Section 2:
General Fund fund
Replacement Fund.
An additional $931,314 is appropriated from the
balance and is transferred to the Equipment
PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, the
January, 1998.
day of
ATTEST:
John J. Williams, Mayor
Carol L. Freas, City Clerk
Ordinance No. 1771-98
Page 2 of 2
Approved by Finance: ~_A~
December 22, 1997 (sp)
Introduced:
Adopted:
Effective:
January 7, 1998
January 21, 1998
February 21, 1998
CITY OF KENAI
210 FIDALGO AVE., SUITE 200 KENAI, ALASKA 99611-7794
TELEPHONE 907-2811-7535
FAX 907-283-3014 ~
1Vi e mo ran um
Date:
Fl'Om:
December 30, 1997
Mayor and Council
Richard A. Ross, City Manager
Building Maintenance Schedule
Attached is a copy of a building maintenance schedule submitted by Mr.
Springer. This schedule provides estimated funding needs through FY03. It also
sets out a general schedule of maintenance/repairs replacement of building
components. Major City buildings are listed with projected dates for various
maintenance needs.
This schedule x~5il be uril/7~d in preparation of the FY99 budget.
Attachment
mm/kb
Memo [o Rick Ross, City Manager
Page 2
11/19/97
SCHEDULE OF MAINTENANCE
REPAIRS/REPLACEMENT
Recarpet
Repaint exterior
Repaint interior
Relamping (magnetic ballast)
Relamping (electronic ballast)
Upgrade'heating units
Replace heating units
Floodcoat roofs
Reroof
Recoat gym floor
Replace plumbing fixtures
Replace door hardware
Every 10 years
Every 3 years
Every 5 years
Every 10 years
Every 25 years
Every 10 years
Every 20 years
Every 7 years
Every 20 years
Every 5 years
Every 20 years
Every 15 years
The following is the list of specific items and buildings' projecteci 5ye-year maintenance
schedule.
City Hall Heating repair & upgrade 2000 t 1980 , 15,000
Recarcet 1999 1987 38,000
,
Repaint interior 1999 1987 9,000
Install 3-ply roofing 2000 1980 12,000
Relamp lights 2001 1980 60,000
Re~lace plumbing fixtures 2002 1980 6,000
Library
Recarpet
Repaint interior
Relamp lights
Repaint exterior
ReDlace heating unit
Replace plumbing fixtures
Re0aidreptace door
harclware
1998
1998
1998
1999
2002
1999
2000
200O
1975
1990
1985
1996
1999
1975
1975
1975
50,OOO
8,0OO
30,000
5,00O
6,000
40,000
4,00O
5,00O
Memo to Rick Ross. City Manager
Page 4
11/19/97
FACILITY
NEEDED REPAIR
tYEAR TO BEi YEAR LAST*
DONE DONE
COST
Visitors Center Recamet 2002 i 1992 35,000t
Repaint interior 2000 I 1992 6,000
Repaint exterior ' 2000 i 1996 6,000
Upgrade air handling units 2002 I 1992 10,000
,
Install humidifier 1998 i 6,000
Senior Center Repaint interior 1999 i 4,000
Repaint exterior 2000 i 1997 5,000
Upgrade air handling units 2001 i 1981 8,000 '
,
Relamp 2001 t 1981 15,000 '
iii i
Replace plumbing fixtures 2001 } 1981 6,000
Replace/repair door I
hardware 1998 , 1981 6,000
IWarm Stor. 2
Overhead door
replacement
1998 ~ 1980 10,000
,
Aimort
Air handling unit upgrade
Repaint interior
Rooftop heating unit
replacement
Relamp lights
Recarpet
Fioodcoat roof
1998 i 1965
1999
1999
2000
2001
2001
1983
1995
20,000t
7,000 j
30,0001
50,000!
50,000t
AFSS Recamet 2000 . 1986 35,000
Repaint 2001 ' 1996 6,000
Install 3-ply roofing 2002 1995 15,000
Replace rooftop
heating/cooling unit 2002 1986 60.000
~ , ~ , ,
WORK SESSION NOTICE
The Kenai City Council will convene in a work session on
MONDAY, JANUARY 19, 1998. The work session will be held
in the Kenai Council Chambers and begin at 6'30 p.m. The
purpose of the work session is to discuss the establishment of
an Equipment Replacement Fund; building maintenance;
Challenger RFP/potential sites; mid-year financial review; and
review of legislative priorities.
The public is invited to attend and participate.
Carol L. Freas
City Clerk
Publish' Friday, January 16, 1998
Community News: Monday, January 19, 1998