HomeMy WebLinkAbout02/18/2015 06 Capital Improvements DiscussionBUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No. 6.
For Meeting of: February 18, 2015
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ITEM TITLE:
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SUMMARY EXPLANATION:
Capital improvements discussion
Tony O'Rourke, City Manager
To date the City Council has made a concerted effort to address the City's capital improvement
backlog, starting with a $20 million investment to grind and overlay 120 lane miles. In addition,
the City Council has committed $8 million to transform North 1st Street. Both these investments
were made without any need to increase taxes or fees.
This fall staff informed the City Council it had an additional $17 million or $1,750,000 annual
debt service capacity to invest in City improvements without the necessity to increase taxes or
fees. At least $750,000 annual debt service has to be devoted to parks and recreation capital
improvements based upon the passage of City Charter Proposition 1.
To that end, the City Council on November 10, 2014, prioritized the following capital
improvements:
$4.5 million for an aquatic center with a matching $4.5 million from a private partner. City
projected annual debt service of $345,000.
$4.1 million for a soccer facility with a matching $4.1 million form a private partner. City
projected annual debt service of $380,000.
$7.1 million for a public plaza and parking enhancements with a matching $7.1 from the
private sector. City annual debt service of $595,000.
$1.2 million for airport access and infrastructure improvements. City annual debt service
of $100,000.
Further details of the City Council's capital improvement capacity and budget process are
attached.
Resolution: Ordinance:
Other (Specify):
Contract: Contract Term:
Start Date: End Date:
Item Budgeted: Amount:
Funding Source/Fiscal
Impact:
Strategic Priority:
Insurance Required? No
Mail to:
Phone:
APPROVED FOR
SUBMITTAL:
RECOMMENDATION:
ATTACHMENTS:
Description
❑ Capital improvement memo
City Manager
Upload Date
2/12/2015
Type
Cover Memo
MEMORANDUM
February 11, 2015
TO: The Honorable Mayor and City Council
Tony O'Rourke, City Manager
FROM: Cindy Epperson, Director of Finance and Budget
RE: Council input on Capital Investments
The following is a summary of reports that went to City Council in 2014 that referenced funding for
future capital investment:
• Five -Year Financial Plan -April 8, 2014
Page 9 and 10 discusses Debt Capacity, and the projections of Debt Service included in
the plan for future capital expenditures --$200,000 in 2015, growing to $1,000,000 in
2016 going forward which would support "$10-$12 million in capital improvements".
Note: The interest rates used for this projection was very conservative i.e. 5.5% for 20
year and 4.5% for 15 year. Subsequent correspondence with our bond underwriter
indicated that we can obtain proceeds of about $14.5 million with $1 million annual debt
service for 20 years assuming a total interest cost of 3.16%.
• 2014 Business Plan -Updated July 26, 2014
Included "next steps" for the North 1St Street and Downtown Plan
• Capital Investment Study Session -October 28, 2014
Listed 11 Capital Projects. Noted that "City staff has identified other opportunities to
invest an additional $17 million dollars" ... "for community capital improvements". Note:
The debt service to support this amount of investment consists of the $1 million
identified in the Five -Year Plan, coupled with the $750,000 of budget cuts made for the
Parks & Recreation initiative in the 2015 budget. Our total debt service capacity of
$1,750,000 could support $25 million assuming a 20 year payback with a total interest
cost of 3.16%. If the time of payback is shortened for some projects or interest rates rise,
the amount that can be financed would be reduced accordingly.
• Executive Summary of 2015 Preliminary Budget -October 28, 2014
Listed capital projects that are in early phases — i.e. North 1St Street
• Capital Investment Study Session -Repeated November 10, 2014
Listed 11 Capital Projects, updated to reflect capital costs and proposed funding
sources, including estimated annual debt service by project. Council acted at this
meeting to have the indoor pool partnership be the number one priority, followed by
plaza funding, then Airport improvements.
• 2015 Preliminary Budget Summary -presented to City Council November 18, 2014
• Ordinance Adopting the 2015 Budget -December 9, 2014
Included the $750,000 Parks & Recreation capital set-aside in accordance with the voter
approved charter amendment.
HDB Daily/JL 1