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CASE # 1998 - 2000 CAPITAL OUTLAY By: Ryan R. Schroeder, City Administrator Background: Through memorandums, dated April 4 and April 18, 1997, Council was informed of staff discussions/decisions regarding 1998 Capital Outlay. Each year, early in the budget process for the succeeding year, departments submit requests for funding of capital items (generally other than improvements to land). These requests are then reviewed by a staff committee that is comprised of department managers and supervisors. The review consists of an explanation of the need for the equipment by the proposer, followed by a question and answer opportunity. At the completion of the review, each member of the review committee independently ranks each of the requests by level of need/importance to the municipal operation. These rankings are then compiled, to arrive at a committee ranking. This ranking is then reviewed by the committee to discuss whether individual items should be raised, lowered, added or removed from the tally sheet. The end result is that we have a list of Capital Outlay items proposed for budget consideration. Each year, the above process generally begins with departmental requests totaling close to $1 million. By completion of the budget by Council, these requests are pared down significantly. Over the past three years, the General Fund has averaged a contribution toward capital of $170,452 (with other funds, such as the Equipment Replacement Fund, picking up additional amounts). At this point, the staff committee process has pared the general fund contribution from the 1998 budget down to $306,720. This year, staff is approaching Council in a manner somewhat different from past years. This year we are forwarding to you projected capital purchasing for not only 1998, but also the years 1999 and 2000. We are doing so in that we are concerned that we have projected some major big ticket items within the next three years. In any Capital Outlay refinement, Council needs to be informed of the impact of deferred purchasing on future budget years. You will note that at this point, the staff committee is projecting over $300,000 of Capital Outlay needs in each of the next three years. Department managers and supervisors are invited to be in attendance at this meeting. This will provide the Finance Committee the opportunity to ask what you may regarding any of the three budget years discussed here. Committee Action: Based on discussion Reviewed by: City Administrator All Department Heads/Supervisors FC: 05/27/97 7 /jmt