11-23-2015 Council Work Session Packet

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CIP OVERVIEW The overall goal of a Capital Improvement Plan {CIP} is to maintain facilities and schedule upgrades and replacements to avoid system failures and/or extraordinary short-term expenses. Once established, the plan should be updated annually to reflect changing maintenance needs and capital resources. The typical planning period for a CIP is five years; however, the City of Orono has chosen to evaluate its needs for planning purposes for a period of 15 -years. The Capital Improvement Plan is included in Appendix A of this report. The first five years of the plan are intended to provide short term needs that can be used as the basis for the City's annual budgeting process. The remaining 10 years are intended to provide the City with general planning level estimates so that the expenditures can be spread out over time and the costs can be anticipated and planned for. Using the City's 2016 budget and current fund levels as a baseline, projected fund balances have been included in Appendix B of this report. In general, the following funding sources are available to fund the Capital Improvement Plan: • General Fund — Funding improvements out of the general fund will require the City to account for the improvements when the City's tax levy is established. Funding for the Police CIP is mainly from the general fund. The general fund is typically not considered a good funding source to cover the cost of larger infrastructure improvements such as street and utility reconstruction. • Park Fund — This fund is used for the acquisition, development, and improvement of City parks. Funding comes from Park dedication fees and interest earned on the fund balance. Improvement / Equipment Overlay Fund — This fund is used to buy non -police general fund department assets such as equipment, and IT purchases. Some park and golf course expenditures are also funded by this fund. The source of funding for this fund is an annual transfer from the general fund. • Community Investment Fund — This fund has been established to fund projects that benefit the entire community and have no other funding source. The original amount in the fund is from the remaining balance of the Building Fund, which was created to construct City Hall.