CAPITAL BUDGET AND MULTI-YEAR CAPITAL PLAN SECTION 1 INTRODUCTION INTRODUCTION. Purpose of the Capital Improvement Plan

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1 INTRODUCTION Purpose of the Capital Improvement Plan The Multi-Year Capital Plan (the Capital Improvement Plan or CIP) is an official statement of public policy regarding long-range physical development in the City of Miami. A capital improvement is defined as a capital or in-kind expenditure of $5,000 or more, resulting in the acquisition, improvement or addition to fixed assets in the form of land, buildings or improvements, more or less permanent in character, and durable equipment with a life expectancy of at least three years. The Capital Plan is a proposed funding schedule for six years, updated annually to add new projects, reevaluate project priorities and revise recommendations, with the first year of the plan being the Capital Budget. The Capital Budget Miami s Capital Budget is distinct from the Operating Budget. The Capital Budget represents a legal authorization to spend, during the first year of the plan, funds from Federal, State and various other sources and is adopted separately from the six year plan by means of an appropriations resolution. The Capital Budget authorizes capital expenditures while the Operating Budget authorizes the expenditure of funds for employee salaries and the purchase of supplies and minor equipment. Capital projects can have an impact on the operating budget through additional costs, revenues or cost savings. The Multi-Year Capital Plan includes a section detailing future impacts to the Operating Budget. Legal Authority Legal requirements for preparing Miami s Capital Plan are set forth in the Florida Statutes and the City of Miami Code. A capital improvement programming process to support the Comprehensive Plan is required by the Local Government Comprehensive Planning and Land Development Regulation Act, more particularly, Section of the Florida Statutes (2005). Further, the Financial Integrity Ordinance, Chapter 18, Article IX / Division 2 of the City Code requires the development and approval of a multi-year capital plan. CIP Development Process The last City of Miami Capital Improvement Program and Multi-Year Capital Plan (aka Capital Plan) was finalized in November 2004 and approved by the City Commission on November 18, The primary focus of the Department of Capital Improvements and Transportation (CIT) since then has been the delivery of the projects outlined in this plan, particularly the $155 million of projects funded through the first series of the Homeland Defense/Neighborhood Improvement Bond (HD1). 5

2 Since the November 18, 2004 Commission approval, CIT has brought various ordinances and resolutions before the City Commission to approve amendments that adjusted the funding allocations within the Capital Plan to reflect the following: Project deferrals and advancements (swaps) between HD1 and HD2 to insure the commitment and expenditure of all HD1 proceeds; Increased funding allocations to projects based on cost escalation due to highly competitive construction market conditions currently being encountered by state and local governments; Allocation of new revenue collections or sources (such as impact fees, local option gas tax and grants) to projects; Modification to projects (additions or deletions) based on unforeseen conditions or changed priorities. The CIP development process for the Capital Plan included surveys of all of CIT s client departments, such as Police, Fire-Rescue, Parks, Public Facilities and others, to determine their capital project needs. This information served as the basis for the Capital Plan in conjunction with the listing of projects that were predefined in the Homeland Defense/Neighborhood Improvement Bond voter referendum. The development process for the Capital Plan was approached somewhat differently than in the prior year, based on the following constraints: CIT s primary focus was the delivery of the HD1 and other current year funded capital projects; The significant cost escalations based on current market conditions required the reallocation of significant portions of capital funding to cover budget shortfalls on existing funded projects; The required reallocation to preserve the integrity of the existing funded project commitments precluded the funding of many new projects. In addition to primarily focusing on the delivery of the HD1 and other current year funded capital projects, CIT has focused on development of the proposed $155 million Streets Bond to address needed street infrastructure improvements and the City of Miami Streetcar project, which is a critical element in the City s compliance with state mandated transportation concurrency. Both of these initiatives are discussed in section 3 of this document. It is anticipated that the Capital Plan (to be presented to the City Commission by March 31, 2007) will include a more comprehensive assessment of client department needs to provide the City of Miami with a clearer picture of the citywide unfunded needs for capital improvements and infrastructure. This will serve as the basis for development of a comprehensive funding strategy to address these needs. 6

3 Prioritization Criteria In addition to the surveying of all of CIT s client departments to determine their capital project needs, CIT uses a hierarchy of criteria to determine how projects are considered for funding on a yearly basis. Projects with the highest rankings, or in the case of projects meeting more than one criterion, are given priority for funding and implementation. The criterion used is listed as follows in the order of priority: Legal Requirements- These projects are funded based on the need to comply with legally mandated requirements set forth by Federal, State and local governments. These types of projects may be required as a result of binding settlements with other governmental agencies to meet current codes, ordinances or health and safety issues. An example of these projects may be federally mandated compliance with ADA requirements either citywide or at a particular park or facility. Essential Improvements- These types of projects demand funding for improvements necessary to the functioning of facilities or infrastructure. This criterion measures the extent to which a facility or infrastructure has deteriorated and needs improvements relative to the overall condition of similar structures. Bridge repairs, storm water infrastructure improvements and repairs, and roadway resurfacings highlight a variety of public works related projects that would fall under this criterion. Facility roof replacements and structural damage as well as fire station renovations are examples of essential facility improvements. Efficiency Improvements- This criterion measures those projects that once complete will increase efficiency or result in overall cost savings to the city. Such projects may benefit a greater number of people or more efficiently and effectively provide and support the defined functional requirements of the intended use. Projects such as these include renovation to offices, layout or workspace within a building, planning or zoning department where a smoother and more fluid processing of plans equates to time savings and increased customer service. Revenue Producing- These projects when completed would generate additional revenues to the city. Projects of this nature show an overall return on investments, and should be measured on the risk involved. The criterion measures the number of people who will benefit from the project, both directly and indirectly, and the associated costs versus revenues generated. Elements considered in the rating include the project type and overall community needs. Such a project might include a new park with a community center and water park. Service Improvements- These types of projects demonstrate an increase delivery capability when completed. This criterion measures the number of people served and the benefit derived from a project. Replacements and renewals, which bring facilities up to acceptable standards and expand capacity, such as a marina expansion and renovation are illustrations of these types of projects. Service/Space Expansion- These are projects which result in expansion of space to serve the needs of the community. Such projects, typically parks or public facilities, would include renovations, additions, expansions or new construction of recreation centers, fire stations, police facilities, theatres and convention centers. 7

4 Multi-Year Capital Plan Overview The Multi-Year Capital Plan is organized into eleven (11) distinct funds, some with subcategories, as follows: Fund 301 Community Redevelopment Area (CRA) Fund 311 General Government Projects Citywide Services Communications/Technology Environmental Fund 312 Public Safety Police Fire-Rescue Fund 313 Disaster Recovery Fund 325 Public Facilities Stadiums Auditoriums Marinas Redevelopment Historic Preservation Fund 331 Parks and Recreation Fund 341 Streets and Sidewalks Fund 343 Mass Transit Fund 351 Sanitary Sewers Fund 352 Storm Sewers Fund 353 Solid Waste The total value of the six-year plan is over $805.2 million, representing 509 projects throughout the various funds. The following graph shows that the Streets and Sidewalks fund accounts for the largest portion of the total Capital Plan funding at $319.9 million or 39.7%. The Parks and Recreation fund, the second largest, accounts for $141.3 million or 17.5% of the overall Plan value. The Public Facilities fund is the third largest fund accounting for $94.0 million, or 11.7% of the total Plan. 8

5 Funding Summary By Fund - Total of $805.2M 301-CRA projects 311-General Government $31.2M 3.9% $2.2M 0.3% $91.7M 11.4% $4.7M 0.6% $2.8M 0.3% $41.3M 5.1% $69.5M 8.6% $6.5M 0.8% $94.0M 11.7% 312-Public Safety 313-Disaster Recovery 325-Public Facilities 331-Parks and Recreation 341-Streets and Sidewalks 343-Mass Transit 351-Sanitary Sewers 352-Storm Sewers $320.0M 39.7% $141.3M 17.5% 353-Solid Waste Growth Management Act With the leadership of Governor Bush, the Florida Legislature passed significant legislation (Senate Bill 360) to modernize Florida s growth management framework. Signed into law on June 24, 2005, the landmark new growth laws are intended to insure Florida can provide adequate public infrastructure to meet the needs of a population that is expected to double in size in the next 100 years. The policy objectives behind the new growth management framework include the following: Improving the link between land use planning, capital improvements element (CIE), and local government budgeting; Establishing concurrency for all major development impacts, including transportation, water supply and schools; Allowing pay and go in some instances for transportation and public school facilities; Encouraging development in the most appropriate locations; Promoting regionalism; Allocating substantial state funding for roads, schools and water supply over the next 10 years to pay for infrastructure of statewide priority and to address backlog while linking program funding policies to growth management objectives; and 9

6 Ensuring successful local implementation of new requirements through appropriation of funds to the Department of Community Affairs for provision of necessary technical and financial assistance to support implementation of new planning requirements. The portions of the Growth Management Act that are most relevant to the City of Miami involve Transportation Concurrency, Proportionate Share Mitigation Options Pay and Go and the Capital Improvements Element and Financial Feasibility as discussed below: Transportation Concurrency - The new law states that transportation facilities needed to serve development must be in place or under construction within three years of time of issuance of the building permit and that only the first three years of the local work program can be relied upon for concurrency purposes to shorten the time period between development and the provision of needed roadway capacity. Another important change in the law relates to transportation concurrency exception areas (TCEAs), transportation concurrency management areas (TCMAs) and multi-modal transportation districts (MMTDs). The entire City of Miami is a TCEA. The new law requires that when adopting these special districts, local governments do a better job of implementing multi-modal strategies. In addition, the existing TCEAs must be updated to meet the new requirements over the course of the next several years. Proportionate Share Mitigation Options Pay and Go - It was understood that these new requirements of the Growth Management Act would take some time to implement and that local governments already have backlogged facilities. The new law therefore contains provisions for pay and go for both schools and transportation facilities. The transportation proportionate share option will be adopted by local ordinance, similar to the concurrency management system, and should become a component of that system. The new law requires that if transportation facilities are scheduled in the five year plan of capital improvements in the comprehensive plan or in a long-term concurrency management system, that a developer be allowed to move forward with a project once they have paid their fair share of that programmed facility, even though the facility will remain temporarily below the adopted level of service standard. FDOT has prepared a draft model ordinance to provide guidance on this issue and how it relates to impact fees. Local governments must adopt a proportionate share mitigation ordinance by December 1, Option B of this draft ordinance provides a concept for applying the Proportionate Fair-Share Program toward mobility improvements within a TCEA. Because a TCEA is intended to incorporate significant multimodal improvements and often has constrained roadways, an area-wide approach is suggested. This approach advances Section F.S., which requires local governments to adopt and implement strategies to support and fund mobility within these areas, including alternative modes of transportation. Capital Improvements Element and Financial Feasibility - The 1985 Growth Management Act required that local plans be economically feasible, i.e., that there be a way to fund the improvements necessary to achieve and maintain adopted levels of service standards. The new act provides some additional clarity on this issue through a more precise definition of financial feasibility. Under the new law, if a local government fails to update its Capital Improvements Element by December 1, 2007 or fails to update the Capital Improvements Element annually thereafter, no amendments may be made to the future land use map until the annual update is submitted. 10

7 In essence, the Growth Management Act requires that local governments insure concurrency of development with needed infrastructure by mandating one of the following options: Developers construct at their own expense in association with their development all needed infrastructure improvements to insure the required level of service; Developers pay their proportionate fair share of all needed infrastructure that is already scheduled in the five year plan of capital improvements in the comprehensive plan; or, Local government fund in their financially feasible Capital Improvements Element all needed infrastructure improvements to insure the required level of service associated with development approved by the local government. 11

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TABLE OF CONTENTS LIST OF TABLES

TABLE OF CONTENTS LIST OF TABLES TABLE OF CONTENTS A. GOALS, OBJECTIVES, AND POLICIES... 3 B. SUMMARY... 17 LIST OF TABLES Table IX 1: City of Winter Springs Five-Year Schedule of Capital Improvements (SCI) FY 2013/14-2017/18... 11 Table