Archive for Thursday, June 14, 2007

Council reforms CIP process

June 14, 2007

As it took steps last Thursday to get the first of the projects on its recently approved five-year capital improvement project list started, the De Soto City Council approved a process that reformed how it develops, schedules and finances capital projects.

When the council started considering a new five-year program early this year, City Administrator Pat Guilfoyle promised to present the council with a proposal to refinance the city's existing debt. That restructuring, which will save the city $625,000 in the next five years, was part of reforms.

But what Guilfoyle, legal adviser Gina Riekhof and financial consultant Jeff White presented to the council went much further. The plan would establish an endless five-year CIP, which would have the city council consider projects for a fifth year during its annual budget considerations.

A list of projects totaling $7.9 million was developed earlier this year after joint meetings of the city council and members of the De Soto Planning Commission, Parks and Recreation Commission, and De Soto Economic Development Council.

However when the list was presented to Riekhof in recent weeks, she threw a red flag.

De Soto voters would have to approve funding for the development of Kaw Riverfront Park in the West Bottoms, the park at Lexington Avenue and Commerce Street and several other projects on the list through a referendum, Riekhof said. As an alternative, she proposed the council adopt a charter resolution authorizing the use of bond funds on the selected projects.

"Cities do with frequency charter out of the election requirement," Riekhof said. "All the improvements listed here are standard city projects. This says the city council has thoroughly vetted the capital program improvements listed in this charter ordinance."

Once it is published twice (June 14 and 21) in The De Soto Explorer, there is a 60-day window for De Soto residents to file a protest petition against the charter ordinance, Riekhof said.

The new continual five-year program would change how the council scheduled and financed the CIP, Guilfoyle and the consultants said.

It had been assumed the new five-year CIP would be frontloaded with many of its projects done in the first one or two years. That was the case with the city's first five-year CIP adopted in 2001.

White said that approach might cause cash flow problems, constrain the council's ability to respond to new demands or economic conditions and create the wrong perception with the public.

"If the populace doesn't see anything going on in years four and five, they might think you have a two-year program instead of a five-year program," he said.

Instead, Guilfoyle and the consultants suggested the projects be spread out over the five years.

Rather than bond all the projects for the next five years -- creating the need to start making interest and principal immediately -- the city would take out temporary notes each year for the projects selected for the next year, Guilfoyle and White said. That debt would be rolled over into bonds in one year or when the bond market was favorable, they said.

With that, financing would be structured so the next year's debt obligation always would be the city's largest and would decline over the five-year period, White said.

"This will all be integrated into the city budget process. That's big city stuff there," Mayor Dave Anderson said of the new process.

Riekhof said a temporary note to fund the first projects on the CIP list would be taken out in August should there be no protest to the charter ordinance.

City engineer Mike Brungardt shared with the council a possible schedule of CIP projects. It was only a draft, he stressed, and encouraged the council to make changes.

Brungardt said he gave priority to the first phase of the Kaw Riverfront Park the council had indicated it wanted finished in time for the 2008 De Soto Chamber of Commerce barbecue contest in the fall of 2008. In addition, he scheduled the repaving of 83rd Street east of Kill Creek Road and the installation of a roundabout at the Kill Creek Road and 83rd Street intersection in 2009 and 2010 because that would be when the city would be eligible for funding through the Johnson County CARS program, the city engineer said.

The proposed scheduling in 2011 of the $700,000 streetscape upgrade of the downtown two-blocks of 83rd Street did cause concern.

"We've done an awful lot on this downtown revitalization and to wait until 2011, I don't like," Anderson said.

The council agreed to have a special meeting at 5:30 p.m. Thursday on the scheduling of the CIP list.

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