2014-06-11 CC Packet - Laserfiche WebLink

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Teresa Bender From: Dallas Larson Sent: Monday,June 02, 2014 4:12 PM To: Ben Fehrenbacher; D Love;Jeff Paar; Kurt B. Glaser; Steve King; Tom Wilharber Cc: Teresa Bender; Paul Palzer; Ellie Paulseth Subject: Capital Equipment Attachments: 2014-06-02 Capital Equip Schedule.pdf Attached is a capital equipment schedule that implements what was approved by the council as part of the 2013 Budget process.The past two years, the City included $54,000 in the budget to finance the capital equipment replacements. Funding is proposed to increase at about$1000 per year, beginning in 2015.The replacement amount is the estimated net cost for the replacement vehicle,adjusted for the estimate value to sell or trade in the vehicle that is being replaced. The schedule shows replacing the large plow trucks on a twenty year rotation, the one-ton dump truck every six years, the larger pickup trucks every five years and the compact pickup truck(s) every eight years. I have run the schedule out to 2048 to demonstrate that the funding stream supports the equipment replacement rotation. Building roofs, carpets and HVAC replacements are among the financed items. Because dump trucks have significant cost to outfit them, short rotations do not work very well.The smaller trucks have a predictable depreciation in value that is roughly the same each year, whether you rotate them on a short or longer schedule. The point of the exercise is not to decide the rotation, but rather to prove that the funding stream generally supports the equipment rotation on a long-term basis and avoids budget shocks.The Council can decide what equipment to actually replace in a given year, based upon needs and conditions at that time. The schedule requires regular updating to reflect actual costs and to adjust for vehicle residual values and inflation. While the schedule does not generally support payment for equipment additions, I did include the proposed addition of a used compact pickup truck, since the dollars were small. I included the replacements requested by Paul at your last meeting.You approved replacement of the one-ton dump truck. Other expenses that will come from the fund in 2014 were computers that needed to be updated.The schedule shows that the funding is available to support the requested equipment, if the Council wishes to allow it. Please let me know if you should have any questions. Dallas Larson,Administrator City of Centerville 1880 Main Street Centerville, MN 55038 651-429-3232 1 41