ARLINGTON COUNTY, VIRGINIA

Transcription

1 ARLINGTON COUNTY, VIRGINIA County Board Agenda Item Meeting of June 26, 2004 DATE: June 10, 2004 SUBJECT: Fiscal Year (FY) Capital Improvement Program Adoption C. M. RECOMMENDATION: Adopt the $942.3 million FY Biennial Capital Improvement Program (CIP) as recommended by the County Manager with the following amendments based on guidance from the County Board at the CIP worksession. The attached charts include amended funding levels. A. Reduce the FY 2005 Bond funding and increase the FY 2006 PAYG funding for the Columbia Pike Bikeway Project by $25,000. B. Increase the contribution to the METRO Capital Program funding by $21.8 million based on anticipated increases in federal, state and other funding sources. C. Amend Arlington Public Schools CIP funding, as requested by the Arlington School Board to $251.1 million. (net decrease of $30.6 million). ISSUES: What is the appropriate funding level and financing strategy for the FY CIP? SUMMARY: The amended County Manager s proposed CIP represents the outcome of the process established by the County Board to plan, fund, and implement capital projects over the next six fiscal years. The CIP reflects the County s capital improvement objectives and priorities in Arlington s neighborhoods and commercial corridors. Improvements include parks, recreation, public safety, community conservation, technology, pedestrian systems, transportation, schools, utilities, and other capital programs. The CIP document includes details of the County Manager s proposed CIP as presented to the County Board in May. Since the release of the proposed CIP, several amendments have been County Manager: County Attorney: Staff: Michelle L. Ferguson, Assistant County Manager Gustavo Vega, Senior Financial Analyst, Department of Management and Finance David Miller, Financial Analyst, Department of Management and Finance

2 recommended. The following table summarizes the overall levels of the CIP as considered at various steps in the process. FY 2005 FY 2010 CIP Totals (in $1,000) As Proposed As Adopted by School Board Revised County Manager Recommendation County $ 359,227 $ 382,759 Schools $ 281,721 $ 251,140* Utilities $308,422 $308,422 Proposed $ 949,370 Revised $ 942,321 * Excludes $2.5 million in FY 2003 close-out funds allocated to major construction projects as part of the Arlington Public Schools adopted FY 2005 FY 2010 CIP. FY 2005 Bond Total - CY 2004 Bond Referendum (in $1,000) As Proposed As Adopted by School Board Revised County Manager Recommendation County $ 129,900 $ 129,875 Schools $ 79,900 $ 78,128 Proposed $ 209,800 Revised $ 208,003 BACKGROUND: The CIP, which includes the County government project plans and the School Board adopted costs and details, is primarily a planning document. As such, the CIP is subject to Subject: FY CIP Adoption 2

3 amendment and updating as the needs of the community change and become better known, and the proposed projects move closer to funding and final approval. Staff monitors changes in the community to be able to take advantage of opportunities that arise in scheduling and funding capital improvements in conjunction with private sector development and redevelopment. As priorities change and opportunities arise, staff reassesses the County's capital improvement program and proposes changes which will affect the timing and funding of projects. The proposed CIP represents staff s best evaluation, at this time, of overall capital needs. The County government portion of the CIP is prepared on an interdepartmental basis with staff expertise from each program area utilized to help prepare each segment of the proposed CIP. Since the proposed CIP was released in mid April, staff has met with 14 Commissions and Committees to present the CIP and solicit input. The CIP was published in hard copy, on the County website, and CD-ROM. Over 300 hard copies have been distributed. Additionally, the County Board held a CIP Public Hearing was held on May 25, DISCUSSION: The Proposed FY 2005 FY 2010 CIP includes significant investments for fulfilling Arlington s vision as a world-class urban community with secure, attractive residential and commercial neighborhoods. The CIP is based on fiscal policies that are consistent with Arlington s triple-a bond ratings. The CIP represents expenditures for strategic investments based on a variety of planning processes completed or in progress. Major initiatives include implementation of the North Tract Master Plan and a collection of programs that facilitate Arlington s continued transition from a car-oriented suburb to a people-oriented urban community. Through this CIP, Arlington continues to build on its history of sound capital planning. The FY 2005 FY 2010 CIP is developed in the tradition of Arlington s long history of fiscal prudence, sustainability, and continuous improvement. FISCAL IMPACT: This CIP represents a fiscally sustainable capital plan. The Arlington County Board adopted debt policies to establish fiscal parameters for how General Obligation debt should be incurred. Arlington County must follow the requirements set out by Article VII of the Constitution of Virginia, the Public Finance Act and any local charter, resolution or ordinance in order to incur debt. The issuance of Arlington County General Obligation bonds must be approved by public referendum. Certain types of debt are excluded from the referendum requirement, including revenue and refunding bonds. In an effort to maintain fiscal responsibility and control, the County Board has established the following debt targets as part of the debt policy: Ratio of Tax supported General Obligation and Subject to Appropriation Financing to Market Value of County Taxable Real and Personal Property (4%) Ratio of Tax supported Debt Service to General Expenditures (10%) Ratio of Tax supported General Obligation Debt to Resident Per Capita Income (6%) Subject: FY CIP Adoption 3

4 In determining the size of the recommended bond issues, we have considered Arlington s affordability guidelines and the benchmarks considered by rating agencies, such as the following: During the six-year period of this CIP, the County s outstanding General Fund serviced General Obligation Debt and Subject to Appropriation Debt as a percentage of Market Value of County Taxable Real and Personal Property is projected to peak at 1.93 percent. This ratio is projected to decrease to 1.77 percent in FY This is well within our four-percent target. In FY 2005, for every dollar spent by the County and Schools, about 8 cents will be applied to debt service. The County estimates that in FY 2010 for every dollar spent by the County, 9.6 cents would be applied toward debt service. The Tax supported Debt Service to General Expenditure debt ratio target states that no more than 10 cents of every dollar spent by the County and Schools be spent on debt. Another assessment is the Debt to Arlington Resident Per Capita Income ratio. At the end of FY 2003 this ratio was 4.56 percent. The County estimates that the Debt to Income ratio will reach a peak level of 5.99 percent at the end of FY 2007 and come down by FY 2010 to 5.54 percent. While the County s ratio target is not exceed six percent, Arlington s self imposed target is significantly below the ratio average for local governments nationally and will not represent a risk to the County s triple AAA rating. In order to ensure compliance with these benchmarks, development of this CIP has focused on affordability based on modest levels of revenue growth. Historically, annual revenue growth has averaged over five percent for the past fifteen-year time period. Both the County s and the School s bond proposals are supportable based on Arlington s growth trends. Additional fiscal safeguards built into the County s capital funding approach include the scheduling of bond sales based on actual project construction schedules and biennial referenda. This incremental introduction of new debt enables the County to reevaluate our priorities or defer commitments in the unlikely event that economic conditions ever deteriorate sharply. ATTACHMENTS: Subject: FY CIP Adoption 4

5 Several attachments are included with this report. Attachments A-E are presented to illustrate the fiscal impacts of the amended FY CIP financing strategy on future debt ratios and statistics. Attachment G is presented at the request of the Arlington County Public School staff. The information in attachment H is the staff response to questions raised at the June 1, 2004 County Board Worksession. Attachment A Attachment B Attachment C Impact of FY CIP on Debt Ratios Ratio of Tax-Supported Debt Service to General Expenditures Summary of Tax-Supported General Obligation Bonds and Subject-to-Appropriation Type Financing Attachment D Tax-Supported General Obligation Bonds & Subject to Appropriation Financing As Percent of Market Value Attachment E Attachment F Attachment G Tax-Supported General Obligation Debt to Income Ratio Amended FY CIP Summary (Four Pages) Schools FY CIP transmittal letter and Funding Summaries - School Board transmittal letter to the County Board (Two Pages) - APS Proposed vs. Amended CIP Summary Schedule - APS Adopted FY 2005 FY 2010 CIP Summary - APS Adopted Major Construction Projects Funding Plan - APS Adopted Minor Construction/ Major Maintenance Schedule Attachment H Response to June 1, 2004 County Board Worksession discussions - North Tract Phase I Implementation Schedule - Tyrol Hill Park Implementation Schedule - Ballston Metro Station Access Improvements Plan - Courthouse Metro Station Elevator Entrance Plan Subject: FY CIP Adoption 5