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Finance Commission Minutes May 9, 2017 – Draft Minutes Page 5 of 8 181 Finance Director Miller stated the CIP contains assumptions and estimations on asset lifespans 182 and replacement costs. It also assumes that all existing City functions and programs will 183 continue at current service levels and the City’s asset and infrastructure needs will remain 184 unchanged moving forward. The CIP represents a projection of when asset replacements are 185 likely to occur. Each individual asset is scrutinized prior to replacement to determine whether 186 it’s still needed on if so, whether it truly has reached the end of its useful life. It is not 187 uncommon to defer the replacement of assets if they are still in good working condition. 188 Conversely, we sometimes determine that the replacement of an asset needs to be expedited 189 because it is failing sooner than expected. He explained the capital replacement funds are 190 separate from the operating funds. He stated currently the City has $18 million in the Capital 191 Replacement Funds and the City will use all of these funds within the next 10-years. 192 193 Chair Schroeder asked why the Skating Center and Oval would be included in the general 194 facilities replacement CIP. 195 196 Finance Director Miller stated all the funds were established either for transparency purposes or 197 management and accountability purposes. The City made a distinction between the assets in the 198 parks including the park buildings and those assets located on the City campus. This was done 199 because there will need to be some difficult decisions made by the City Council on what 200 facilities the City makes improvements to. 201 202 Commissioner McRoberts asked how the City prioritizes the needs of the City. 203 204 Finance Director Miller stated the Finance Commission had developed a list of priorities for 205 capital replacements. These have not been put into effect yet because they were just adopted. 206 The City does prioritize the needs and this is through discussions with the City Manager and 207 departments. 208 209 Chair Schroeder stated the Commission also looked at a justification piece to be included in the 210 budget process. She stated the Commission will have to bring this back to a future Commission 211 meeting for additional discussion. 212 213 Commissioner McRoberts asked if money could be moved from one fund to another in the CIP. 214 215 Finance Director Miller stated this would be a decision the City Council would need to make. 216 He stated one of the drawbacks of moving money from one fund to another is if these funds 217 cannot be replaced then there may not be funds available for that particular fund category when 218 they are needed. By previous Council action, the Council tentatively committed to re-purposing 219 $355,000 of expiring debt levy towards facility improvements beginning in 2019. The City 220 Council committed to re-purposing $650,000 of expiring debt levy towards park improvements 221 beginning in 2020. The Council also committed to an additional tax levy of $160,000 in 2018 222 and $200,000 more in 2019 for the pavement management fund. Additional corrective measures 223 will need to be taken to ensure there are funds available for the replacements needed. The City is 224 currently evaluating options for replacing the clubhouse and perhaps maintenance building and 225 Item 3: Attachment A