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PCI Ratings for City Streets May 12,2005 Page 2 01'4 Planning and budgeting for CIP projects is somewhat dependent upon our philosophy or policies regarding fund balances. We have some internal policies regarding where we would like our utility fund balances to be as a result of the 2005-2009 utility rate study. However, we should discuss some other funds: . . The Permanent Improvement Revolving (PIR) fund was established to temporarily finance pavement management projects being partially financed by special assessments or for high cost improvements for which bonds have not been issued, Balances in debt service funds after bonds have matured are credited to this fund as are special assessments for improvements financed by this fund, However, as illustrated in the attached spreadsheet, anticipated expenditures will be higher than revenues. We should determine an appropriate balance to be maintained in this fund, . The Special Revenue Park Fund was established for park/trail acquisition and development. Revenue for the Park Fund comes from developer park dedication fees, contributions, state grants, and investment interest. During the next five years we are anticipating expenses of $21,000 for trail signage and $$32,000 for the Tony Schmidt Park Underpass. Without additional revenue this would result in a remaining balance of approximately $178,000. There is also a play structure at Valentine Park slated for replacement, in the amount of $55,000, which had been planned for 2006 using general fund dollars (we are looking at moving that to a future year), Again, we should have an idea of what kind of balance we would like to see maintained in this fund. Development projects approved over the next five years that include park dedication fees will provide . additional revenue to this fund but we do not have a good way to anticipate what those amounts may be, . The Non-Assessable Fund was created to account for county and other projects the City of Arden Hills will be request to cost participate in a well as some capital projects the City will be unable to assess property owners for. There is no steady revenue source for this fund. Primarily f\U1ds have been transferred here from general fund. The current CIP worksheet would result in the fund dccreasing from $1,5 million to $642,565. It would seem we need to discuss the philosophy ofthis fund as well. MSA funds Minnesota State Aid dollars are used tor qualified improvements on appropriately designated streets. We receivc a designated allotment each year. As has been explaincd in the past, it is possible to "borrow ahead" for MSA dollars (called "advancing"), There are limited dollars available each year for the advancing program, It is also possible to finance improvements internally and the "pay back" the City from future MSA installments, The attached worksheet illustrates a program that will not require advancing or pay back, If we chose to delay the Snelling Avenue project, we would have a very healthy balance available, We could then choose to use some of it for Unassigned Projects listed at the bottom of the spreadsheet. In any case, as we continue to examine the results of our PCI ratings and other information being gathered, and to evaluate priorities, it would be helpful if we had a philosophy regarding the use of MSA .