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Regular City Council Meeting Monday,July 16,2018 Page 4 Finance Director Miller continued that the City's total asset replacement need over the next 20 years is $186.7 million. In contrast to the projected CIP spend- ing of $186.7, the City expects to have only $178.6 million available over that same time period based on current funding and cash reserve levels; this leaves a funding deficit of $8.1 million. By way of comparison, the funding deficit five years ago was approximately$70 million. Finance Director Miller noted that the General Facilities Replacement Fund is projected to have a deficit in 2020 and will have an accumulated deficit of nearly $2.3 million by 2038 unless additional funds are appropriated or planned im- provements are delayed or scaled back. Those projections include approximately $3 million in improvements for the OVAL. The City intends to seek State monies to offset some or all of these costs, but until that outcome is known, the costs are included in the projection. Councilmember McGehee asked what would happen to the fund if State funding is awarded for the OVAL. Finance Director Miller indicated that that additional $3 million would bring the fund back up to zero. Finance Director Miller continued.with his presentation, noting that in the Park Improvement Program over the next 20 years, $14.6 million in planned park im- provements are scheduled with only $9.1 million available based on current reve- nues and cash reserves. He also commented that the Pathway Maintenance Fund is underfunded over the next few years due to a revised cost estimate for the re- placement of the City Hall parking lot. Staff's recommendation is to solve the problem by a one-time $350,000 transfer of monies from the Pavement Manage- ment Fund. Finance Director Miller went on to discuss the Water funds, which have some near-term funding deficits that will need to be addressed with a combination of rate increases and selective asset replacement deferments. He suggested a possi- ble base fee increase of 4-5% to bridge the funding gap in the Water Vehicle and Equipment Fund. He noted the Sanitary Sewer fund is in good shape for the long- term, but there are some deficits in the next 7-8 years. Staff will be recommend- ing an increase in the base fees to shore up the deficits over the next 10 years. Finance Director Miller then talked about the Golf Course/Cedarholm Communi- ty Building funds. There are still some needs like the irrigation system, the mow- ers, the gas pumps, and the maintenance building. This is a conversation the Council has had on many occasions. Now that there is a new business model in place, it is harder for staff to make projections, so modifications will be made to the projections accordingly in the years ahead.