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The Elk River Vision <br />A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community <br />engagement that encourages and inspires prosperity <br /> <br />Request for Action <br /> <br />To <br />City Council <br />Item Number <br />10.1 <br /> <br />Meeting Date <br />November 17, 2025 <br />Prepared By <br />Lori Stich, Finance Manager <br /> <br />Item Description <br />Capital Improvement Plan 2026-2030 <br />Reviewed by <br />Lori Stich <br />Joe Stremcha <br />Cal Portner <br />Tina Allard <br /> <br />Action Requested <br />Review the 2026-2030 Capital Improvement Plan. <br /> <br /> <br />Background/Discussion <br />City staff have identified specific capital projects together with estimated project costs and funding sources to <br />be completed in the next five years. Projects listed for 2026 will be reviewed along with cash flow estimates of <br />the associated project fund. Projects are reviewed annually and updated with the CIP. <br /> <br />Capital Reserve Fund <br />The purchase and replacement of IT hardware/software has been funded by the excess General Fund fund <br />balance. <br /> <br />The current balance designated for the replacement of IT technology is about $471,000. In addition, the fund <br />receives interest income and cable franchise fees to be used for miscellaneous capital outlay items. The <br />undesignated balance of the fund is about $931,000. <br /> <br />Development Fund <br />Used for costs associated with new development projects. The comprehensive update of the zoning ordinance <br />is the only project included for 2026. This project is being carried over from 2025. <br /> <br />Equipment Replacement Fund <br />Established to provide funding for the planned replacement of vehicles and mobile equipment, the majority of <br />funding is provided through annual General Fund departmental charges (Chargebacks) and Local Government <br />Aid (LGA). LGA comes from the state general fund revenue collected through sales and income taxes and can <br />be subject to state unallotment. In 2026, our LGA will decrease by about 85% ($272,300). We anticipate losing <br />all LGA in 2027. <br /> <br />Department chargebacks are based on the amortization of their respective equipment and updated annually. <br />The Public Works Supervisor evaluates the replacement of vehicles and equipment based on the criteria of age, <br />miles/hours, maintenance costs, and usage type. The 2026-2030 vehicle/equipment purchase requests were <br />Page 314 of 379