Memorandum 15-205 Hickerson Memorial Cemetery Expansion

Memorandum 15-205

TO:                       Mayor Wythe and Homer City Council

FROM:                 Katie Koester, City Manager

DATE:                  December 2, 2015

SUBJECT:         Hickerson Cemetery Expansion

At the November council meeting Council asked for more information on the Hickerson Cemetery. As of packet deadline, there are 12 plots left for sale. Business has been brisk since the last council meeting. There are a few individual, isolated plots available in the Hickerson Cemetery. No multiple side-by-side plots are available. The City has purchased 3 adjacent lots for expansion; however, substantial site work has to be done to develop the lots into a cemetery.  Public Works proposed a $350,000 capital improvement project to develop 700 plots in the 3 lots adjacent to the existing Hickerson Cemetery (see attached map). As you are aware, I have not proposed any general fund capital projects in the 2016 budget. Council would need to authorize capital expenditures if the City is to continue offering cemetery plots.

As part of the FY2016 fee schedule, Public Works has proposed a substantial increase in cemetery plot fees. Currently, the fee for a plot is $200. If the cost of the cemetery is to be paid for by plot purchasers, the cost for purchasing new plots should be $1,000. A $1,000 fee is proposed by Public Works based on the following facts:

Public Works estimates the following costs to expand:

Cost of land to expand cemetery   (done)                             $227,500

Cost of improvements (earthwork, access roads, etc.)   $352,000

Design/Planning Approvals/Platting  (done)                        $49,000

               Cost to develop new cemetery plots                                       $628,500

The expanded cemetery provides 700 new plots (at a cost of $898/plot). $102 per plot to help offset operating expenses = $1,000 per plot.

While eventually the cost of development can be recouped through plots sales, it will take quite some time before the general fund recoups the expense. It took 57 years to sell 785 plots at the current cemetery (average of 14 plots a year).

Options:

Do nothing given the current budget situation. Very soon we will run out of available plots.
Amend the 2016 budget to include the full project ($350,000). Identity funding source.
Amend the 2016 budget to include Phase 1 of the project ($200,000). Identify funding source.

Approval of the project will require transferring funds to the Parks and Recreation Depreciation Reserves. Current Parks and Recreation balance is $88,707. So, for example, the Council could transfer $112,000 from City Hall Reserves to Parks and Recreation Reserves. This scenario would wipe out the balance of the Parks and Recreation Reserve account and decrease the funding put towards overdue roof repairs at City Hall. I have included the transfers to reserves proposed in the 2016 budget under Mayor/Council for your information.

Enc:

Map of Hickerson Cemetery

Budget amendment for Phase 1 of Hickerson Cemetery including back up

Proposed 2016 Mayor/Council budget