Fall 2019 Capital Improvement Program (CIP) Worksessions Capital Improvement Program Overview October 30, 2019
A GENDA • CIP Overview (Tonight) • Overview of CIP Development Process • Affordability of CIP • Policy Issues Considered in CIP Development • Public Infrastructure – Transportation, Sewers, Recreation & Parks, Waterfront Flood Mitigation (Nov. 7 th ) • Public Facilities and IT Infrastructure (Nov. 11 th ) 2
CIP D EVELOPMENT P ROCESS • June 2019 : CIP Development What is CIPSC? Process kicks off • Committee of most capital • September 2019 : departments intensive City departments submitted capital project change (T&ES, RPCA, DGS, ITS, DPI, and requests P&Z), charged with: • September 2019 – October • Crafting recommendations for a 2019 : OMB reviews project balanced proposed CIP submissions • Identifying policy priorities and • September 2019 – December themes for the CIP 2019 : Capital Improvement • Presenting recommendations to the Program Steering Committee City Manager (CIPSC) crafts recommendations • Committee chaired by Deputy for the City Manager • January 2020 – February 2020 : City Manager Emily Baker City Manager develops recommendations and finalizes Proposed CIP 3
CIP D EVELOPMENT P ROCESS • FY 2021 – FY 2020 CIP will be a major revision year (“on year”) • CIP follows a biennial development cycle • During off-year, only minor changes to project funding and schedules • Proposed CIP will include new projects, re- estimates of project costs, and changes to project timing 4
CIP C HALLENGES C OST D RIVERS • Significant focus on re-estimating construction/implementation costs • Significant increases in construction related costs are anticipated • Nationwide, construction costs are being pressured by • Increased inflation, • Labor shortages, • Material cost increases, and • Fuel cost increases • Mortenson Construction Cost Index predicts (nationwide) a 6% to 8% increase in nonresidential building construction costs for 2018 • Increased focus on understanding changes in project scope over life of the project • Unforeseen circumstances, design changes driven by community involvement, etc. 5
CIP C HALLENGES C OST D RIVERS (M ORTENSON C ONSTRUCTION C OST I NDEX 2009 – 2018) 135 130 Overall Construction Cost Index (Jan. 2009 = 100) 125 120 115 110 105 100 95 90 Q4 09 Q4 10 Q4 11 Q4 12 Q4 13 Q4 14 Q4 15 Q4 16 Q4 17 Q4 18 A construction cost estimated 5 years ago may have increased by as much as 18%. Ex. A project estimated at $1 million in 2014, may cost $1.18 million today. 6
FY 2020 - FY 2029 U SES $1.6 BILLION Transportation ACPS $237.1 M $479.5 M Other Regional Contributions $8.9 M WMATA $143.3 M IT Plan $64.6 M Community Sanitary Sewers Development $65.2 M $145.6 M Stormwater Management Public Buildings $71.0 M $150.3 M Reservation of Bond Capacity/Cash CIP Development & Capital for City/School Facilities Implementation Staff Recreation & Parks $87.9 M $77.8 M $86.7 M 7
FY 2020 - FY 2029 U SES $1.2 BILLION (G ENERAL F UND U NRESTRICTED O NLY ) ACPS $479.5 M Public Buildings Other Regional $150.2 M Contributions $8.9 M IT Plan $52.8 M WMATA $141.6 M CIP Development & Implementation Staff $53.0 M Transportation Community Development $77.7 M $91.5 M Recreation & Parks $83.7 M Reservation of Bond Capacity/Cash Capital for City/School Facilities 8 $87.9 M
CIP C HALLENGES A FFORDABILITY OF C APITAL P ROGRAM • Support of City and School capital programs are causing significant expenditure pressure on City’s General Fund budget • In FY 2009 , G/F supported debt service and direct cash funding of projects represented 6.0% of general fund expenditures • In FY 2020 , G/F supported debt service and direct cash funding of projects represented 14.1% of general fund expenditures • In FY 2030 , G/F supported debt service and direct cash funding of projects represented 16.6% of general fund expenditures 9
L ARGE D RIVERS OF B ORROWING B ASED ON A PPROVED FY 2020 – FY 2029 CIP • FY 2020 – FY 2029 • ACPS Capital Program ($380.9 M) • WMATA Capital Contributions ($139.3 M) • Waterfront Flood Mitigation ($50.1 M) • City Hall Renovation ($30.8 M) • Street Reconstruction & Resurfacing ($30.4 M) • Witter/Wheeler Campus ($29.5 M) • Fire Department Vehicles & Apparatus ($20.0 M) • Capital Facility Maintenance Programs ($13.0 M) • Fire Station 207 Duke Street ($13.0 M) • Fire Station 205 Cameron Street ($11.0 M) 10
L ARGE D RIVERS OF B ORROWING B ASED ON A PPROVED FY 2020 – FY 2029 CIP • FY 2021 • ACPS High School Project ($103.7 M) • Waterfront Flood Mitigation ($50.1 M) • WMATA Capital Contributions ($14.0 M) • Street Reconstruction & Resurfacing ($4.9 M) • Capital Facility Maintenance Programs ($3.4 M) • City Hall Renovation Planning ($2.4 M) 11
A PPROVED FY 2020 - 2029 CIP P LANNED 10- YEAR B ORROWING - $870.2 M $250 Millions $200 $150 $100 $50 $- FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 GO Bonds GO Bonds - Sanitary GO Bonds - Stormwater 12
D EBT C APACITY O UTSTANDING D EBT AS A % OF G ROSS F AIR M ARKET V ALUE OF R EAL P ROPERTY 2.70% Debt as a % of Gross Fair Market Value of Real Property Limit 2.50% 2.50% 2.30% 2.23% 2.15% 2.14% 2.06% 2.10% 1.99% 1.92% 1.88% 1.90% 1.80% 1.74% 1.60% 1.65% 1.70% 1.50% FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 Outstanding Debt as a % of Gross Fair Market Value of Real Property Limit Note: Excludes Sanitary Sewer and Stormwater Management related debt, which 13 is funded by dedicated revenue sources.
G ENERAL F UND S UPPORT OF C APITAL P ROGRAM $161.7 M 16.6% of G/F $180 Millions $160 $107.0 M 14.1% of G/F $140 $120 $100 $80 $60 $40 $20 $- FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 Debt Service (City) Debt Service (Schools) G/F Cash Capital TIP Cash Capital 14
G ENERAL F UND S UPPORT OF C APITAL P ROGRAM A S C ENTS ON THE R EAL E STATE T AX R ATE 45.0¢ 40.0¢ 38.5¢ 38.3¢ 37.1¢ 36.7¢ 36.2¢ 35.8¢ 34.8¢ 34.7¢ 35.0¢ 31.5¢ Cents on the Real Estate Tax Rate 30.0¢ 26.2¢ 25.5¢ 25.0¢ 20.0¢ 15.0¢ 10.0¢ 5.0¢ 0.0¢ FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 15
H OW TO F UND C APITAL P ROGRAM • Additional $54.7 million needed by FY 2030 to support City and School capital programs • 35% of this increase is related to increases in School capital debt service • Limited tax base growth will not be sufficient to fund increase Alt lternatives • Reductions in City and School programs/capital investments • Increasing the existing Real Estate tax rate • Establishing a separate dedicated Real Estate tax rate for school capital • Consideration of increasing other taxes, which may require state enabling legislation 16
I DENTIFIED C ITY C APITAL N EEDS S UMMARY OF FY 2021 – FY 2030 P ROJECT S UBMISSIONS $300 Millions For FY 2021 – FY 2029, project submissions have increased $470.5 million, over the $250 Approved CIP. $200 $150 $100 $50 $- FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 Approved FY 2020 - FY 2029 CIP FY 2021 - FY 2030 Submissions 17 Note: Excludes Schools, Other Regional Contributions, and CIP Contingency Funds
G UIDING P RINCIPLES FOR P RIORITIZATION • Proposed CIP will not be able to fund all project requests, but will strive to accomplish the following: • Address identified Health & Safety Issues • Meet capacity needs and maintenance needs of Schools • Meet our required contributions to WMATA capital investment • Protect City’s existing assets (State of Good Repair) • Invest in service expansions that have an economic development impact • Within these broad categories, urgency and readiness of projects will also be considered in determining funding levels 18
P ROJECT P HASING Phase I Phase II Phase III (Years 1-3) (Years 4-6) (Years 7-10) • • Project is specific in Service need has scope been identified • • Preferred Alternative Costing is higher-level has been Identified estimate (per unit • Project is in final cost, similar design or completed project) implementation • Costing is based on engineering documents or being developed Funding is aligned to Funding is aligned to specific project(s) identified ‘capital needs’ • As project progresses in CIP, level of planning, specificity of costing, input from City Council & residents increases • Projects should not progress, unless criteria/thresholds are met 19
N EXT S TEPS • The next two worksessions will discuss State of Good Repair by CIP section, and highlight major projects underway or proposed • During these worksessions, consider the following: • The capital projects discussed, relative to the overall affordability of the CIP • Alignment of these projects with City Council’s priorities 20
Q UESTIONS /D ISCUSSION 21
Recommend
More recommend
