Laserfiche WebLink
MEMORANDUM <br />Elk <br />River <br />TO: Mayor and City Council <br />FROM: Tim Simon, Finance Director <br />DATE: August 9, 2010 <br />SUBJECT: 2011-2015 Capital Improvement Plan (CIP) -Equipment <br />portion <br />At tonight's meeting we will review the equipment replacement fund which is a section of <br />the CIP. The equipment replacement fund covers replacement of wheeled equipment and <br />vehicles. The fund is replenished on an annual basis through charges paid by each general <br />fund department through their operating budgets. The amount charged to each department <br />is allocated on the estimated replacements over the next 10 years and updated yearly. In <br />addition, the fund receives a portion of the payment in lieu of tax (PILOT) from Elk River <br />Municipal Utilities, interest earnings, and auction proceeds. This fund maintains a large fund <br />balance, but that is necessary given the sufficient variability as we utilize cash reserves when <br />several costly vehicles axe replaced in the same year. The replacement cycle is continuously <br />evaluated, based on costs and benefits over the next several years, to determine the optimal <br />time to replace vehicles. <br />The City's fleet committee is actively involved in the long-range planning of the replacement <br />of the City's fleet and financial condition of the equipment replacement fund. Mark <br />Thompson is the current chair of the committee. <br />Attachments: <br />• Cash flow analysis of the equipment fund <br />• 2011 detail equipment listing (as recommended by the fleet committee) <br />S: \FIN ANCE\CouncilReports \ 2011-2015equipmentreplacementfund.doc <br />