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Spending plan

Tiffin hires V&K to help create CIP strategy

TIFFIN– The City of Tiffin is paying to learn how to spend its money.
At its May 14 meeting, the Tiffin City Council approved a contract not to exceed $6,250 with engineering firm Veenstra & Kimm (V&K) Inc., to assist in crafting the city’s long-range capital improvements plan, or CIP.
Doug DeBolt and Bob Veenstra presented the proposal, outlining the services V&K provides to cities in comprehensive planning and strategies to pay for capital improvements.
“It’s a pretty methodical process with a heavy emphasis on the financial aspect,” said DeBolt.
Mayor Steve Berner noted that Tiffin has an existing CIP, but City Administrator Michon Jackson needed some assistance in making it more specific.
“We have a CIP plan we adopted and approved, but we didn’t do it by a science,” said Berner. “We sort of threw ideas together and made a wish list. I was looking for a way to get Michon some help to establish a true plan over 10 years.”
About a month ago, Tionna Pooler, president of Independent Public Advisors (IPA), LLC, presented her company’s services in municipal financial planning, and received a verbal commitment from the council. However, Berner said, IPA does not have the engineering expertise of V&K, a helpful component when estimating potential costs of future projects.
“I was looking for someone who had both,” he said.
Veenstra outlined the way V&K walks a city through the process of creating a more comprehensive capital improvements program.
“We are an engineering firm but we also do a lot of work with clients on finance,” said Veenstra. “When we work with communities to build a CIP, we use a blend of two different disciplines. One is engineering experience; you have to have an understanding of projects and what their cost estimates are. That’s really the foundation. The other part is to prioritize it and finance it. To be successful, you have to merge those two.
Tiffin has already experienced the first two steps of the company’s four-part process for creating a CIP, Veenstra said, and V&K will first review the city’s initial project list, then take them through the next steps of prioritizing that list, creating a tentative 10- to 20-year timeline, and refine the scope and cost estimates for each project using an indexing factor to account for future inflation.
V&K will also help the city determine how to best fund different types of projects, whether through revenue debt, general obligation debt or Tax Increment Financing (TIF).
“So that we are building a solid plan that has both an engineering basis and a financing basis,” Veenstra concluded. “It’s important to talk to the city about how you layer in that tax increment revenue. Clearly when you have an urban renewal area it is important to discuss how you leverage that to your best benefit.”
V&K would not be providing any engineering services in this agreement, Veenstra emphasized.
“It’s a plan; it isn’t a project. Our goal is to get the CIP to the point where projects are identified, how you are going to finance them, and when you are going to do them. We don’t think it’s necessary to go clear down into project detail, we just think you need to have a really sound financial basis that is well put together. You decide what level of debt you want to incur and how aggressive you want to be. That way, when it comes time to do projects, you don’t have to guess about what you are doing.”
During council’s discussion on the item, Jackson reminded the group they had previously given verbal approval for IPA’s services, but said she was instructed to delay putting IPA’s contract on the agenda until they had heard from V&K.
“I’ll explain why I did that,” Berner interjected. “You’re all aware that our CIP is out there, but we have no real method for our capital improvements. Tionna would be relying on a (document) we didn’t really develop using a plan. I don’t want to finance something we don’t know is going to work. I wanted more planned development and finance.”
It was enough to convince the council they needed V&K’s help. Council member Jim Bartels moved to approve the contract for V&K’s services. The motion was unanimously approved.