HomeMy WebLinkAboutAgenda - 1/24/2001 - Finance and Personnel Committee City of McHenry
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Clerk'sOfficeand FINANCE/PERSONNEL COMMITTEE MEETING
Administration
(815) 363-2100 Wednesda Janua 24, 2001 — 6:30 PM
Fax(815)363-2119 y� �
City of McHenry Municipal Center
Public Works, 333 South Green Street
Building and Zoning
(815) 363-2170 Aldermen's Conference Room � �, ,�'
Fax(815)363-2173
Pazks and �, � .
Recreation �
(815) 363-2160
Fax(815)363-2173 A G E N D A
Police
(Non-Emergency)
(R15) 363-2200
' l5)363-2149
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Mayor 1. Capital Improvement Program (CIP) Project Selection
Steven J.Cuda and Financial Policies
City Clerk
Pamela J.Althoff 2, Fiscal Year 2001/2002 Budget Review Process
Treasurer
David M.Welter 3. Any and all other business that may properly come before the Committee
Aldermen
WARD 1
William J.Bolger
WARD 2
Andrew A.Glab
WARD 3
Frank S.McClatchey
WARD 4
Steven C.Murgatroyd
WARD 5
William V.Baird
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Delivered:01/19/01
�' MEMORANDUM
TO: Finance and Personnel Committee
City Clerk Althoff
FROM: Doug Maxeiner, Assistant City Administrator �i�-
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FOR: January 24, 2001 Finance and Personnel Committee Meeting
RE: CIP Project Selection and Financial Policies
At the November 15, 2000 City Council Workshop meeting on the Capital Improvements
Program (CIP), a number of suggested policies (attached) were provided for the
consideration of the Council. One set of policy suggestions focused on project selection.
In reviewing these suggested selection policies, it might be more appropriate to call these �
suggestions "guidelines" as they are not as clear cut as typical policies. These
suggestions provide criteria to consider when facing tough choices in selecting projects.
The CIP financial policies identify the information required in the CIP in addition to
� addressing specific funding mechanisms. These policies also address the use of bonds in
funding capital projects and put limits in place to discourage the excessive use of long
term financing. While this Council has been conservative in the area of debt issuance in
the past, future Councils may be less frugal.
The Council should consider implementing guidelines and policies of this nature to
protect and foster the CIP process. Please be prepared to discuss the proposed policies
and guidelines at the committee meeting. Staff will be prepared to address any questions
that you may have on this topic. In addition, the remaining steps of the CIP process
should be discussed if time allows.
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� Project Selection�e�e�ies Guidelines
1. Any development of, or improvement to, physical facilities or infrastructure that
will result in a minimum useful life of ten years and which costs $10,000 or more
is detined as a capital improvement.
2. Projects should be selected based upon objective technical information.
3. Projects should be favored that will contribute to an equitable distribution of
service for facilities throughout the City.
4. Projects should be favored that will encourage private capital investment or
improve the City's tax base,job opportunities and quality of life in the
community.
5. Projects should be favored that will benefit the greatest number of City residents.
6. Projects should be favored that will eliminate conditions detrimental to health,
safetv and general welfare of the community.
7. Projects should be favored that create demonstrated savings and/or revenue in the
� annu�il operating budget.
8. Projects should be favored that are cost effective in terms of capital outlay and
probable operating costs. The expected benefits of a project should be weighed
against its costs. Potential maintenance cost, expected life and capital cost should
be considered.
9. Projects should be favored that are coordinated with other public or private
projects. The City shall give priority to those projects that have the necessary
funding available to do integrated work.
10. Projects should be favored that have a positive environmental impact.
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� Proposed CIP F'inancial Policies
1. The Capital Improvements Program (CIP)plan shall identify projects, their costs
and the revenue sources and amounts needed to finance them.
2. The first year of the CIP program effectively becomes the capital projects budget
within the operating budget for the year subject to the availability of adequate
funds in the operating budget. Approval of the CIP does not guarantee that funds
will be appropriated for the projects included in the first year of the CIP.
3. For General Obligation Debt, the City will maintain a debt to assessed value ratio
that is 25%more stringent than the state debt limit (State limit is 8.625% of EAV;
proposed limit would reduce to this ceiling to approximately 6.5% of EAV or
$25.� million outstanding).
4. The length of time to maturity of bonds issued to finance a capital project shall be
kept as short as feasibly possible but in no instances shall the maturity exceed the '
useful life of the project financed.
5. The City will not use long-term debt for current operations.
6. Where feasible, the City shall investigate the use of all sources of revenue
�-- available before using local property tax funds for capital projects.
7. Where feasible, the City will pursue project financing mechanisms - such as
special service areas, special assessments or other mechanisms -that target
citizens receiving a disproportionate share of the project benefit.
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