AGENDA #5B
TO: Mayor and Town Council
FROM: W. Calvin Horton, Town Manager
SUBJECT: Preliminary Approach to Development of a 15-year Capital Improvements Program
The purpose of this report is to outline a preliminary approach to development of a 15-year Capital Improvements Program that would identify all Town capital needs and result in a funding schedule determined by the Council. We believe such a program would specifically address the issues identified by a Council member in a separate petition regarding assessment of needs for public buildings.
We believe that a 15-year capital improvements program could be developed over a period of several years by making careful use of existing resources, or could be developed faster with additional resources if desired by the Council.
We assume that a normal Chapel Hill process would be followed in every aspect of developing a 15-year program, with a collegial effort by staff, early and significant participation by advisory boards and citizens in every important step, and strong guidance by the Council.
We believe key steps in the process would include:
The Council has adopted 5-year capital Improvement programs for many years.
1989 CIP: For example, the 1989-94 Capital Improvements Program adopted by the Council totaled $79 million for all funds, counting $27 million for construction of Fordham Boulevard and other roads by the North Carolina Department of Transportation, $11 million from the NCDOT and the federal government for transit vehicles and facilities, $5 million in landfill improvements, $6 million in 1986 bond fund projects, and $22 million in unfunded projects. A total of $2.5 million ($500,000 annually for 5 years) was funded from local dollars for small capital improvements.
1991 CIP: The 1991-96 Capital Improvements Program totaled $52 million, with about $10 million to be funded by the Town, including the Town’s share of transportation grant projects, expansion of the landfill, use of 1986 and 1989 bond funds, and about $2.35 million for locally funded small capital improvements.
1992 CIP: The format of the Capital Improvements Program changed with the budget adopted for 1992-97, reflecting the effects of a recession in the State and the community, a structural change in State-shared revenues, and an effort to take into account fiscal constraints. In that year, no new local money was allocated to the Capital Improvements Program. The funding schedule projected a gradual increase in local funding for small capital improvements to $350,000 by 1996-97. The total of the capital improvements proposals, including roads and other projects to be funded by others was $45 million.
1993 CIP: Only $150,000 was allocated for the small capital improvement program in 1993-94, with the allocation proposed to increase to $400,000 annually by the end of the 5-year program in 1997-98. The Capital Improvements Program consisted principally of funded projects and a few road projects to be considered for funding in the state Transportation Improvement Program, totaling $25 million for all projects.
1994 CIP: The Capital Improvements Program for 1994-99 focused on projects for which there was funding from the General Fund, bond funds, grants from the State and federal governments, or other predictable sources. Total expected outlay for funded projects over the 5-year period was $20.2 million. For the first time, the capital improvements budget was fiscally constrained by actual expected funding.
1999 CIP: The most recently adopted capital improvements program, 1999-2004, also is fiscally constrained. Only those projects for which there is a predictable funding source are included in the schedule of capital projects, with the total from all funding sources at $15.9 million. However, the document also includes a section listing long range projects for which no funding sources are clearly identified. Please see the attached copy of the 1999-2004 Capital Improvements Program.
The present focus of the 5-year Capital Improvements Program is on projects paid for by the Town through annual use of General Fund money, locally-funded bond projects and grant funds awarded or expected to be awarded to the Town.
Projects benefiting the Town but carried out by others, such as construction of the new bridge over Morgan Creek and widening of NC Highway 86, are not included in the Capital Improvements Program. Projects completed in association with new development, such as the athletic field and bike trails at Southern Village and the forthcoming public park at Meadowmont are not included either, although such facilities clearly will benefit the Town.
Buses, garbage collection trucks, police cars and similar equipment are part of the operations budget and are paid for through capital equipment replacement programs; computing equipment generally is treated in the same manner, using installment contracts as a primary financing mechanism.
Projects are categorized in five groups in the present program, regardless of funding source (see pages 6-19):
The Capital Improvements Program also lists projects by source of funding (see pages 2-4, 20-21):
In addition, pages 22-25 list projects that are needed but that are beyond the scope and funding plan of the 5-year program.
About one-third of the cost of small capital improvement projects in the 1999-2004 program is for new work (e.g., sidewalk construction) and about two-thirds for maintenance (e.g., curb repairs). Bond fund projects are split about 60% for new work (such as open space and the new swimming pool) and 40% for maintenance projects (such as police department renovations). The main use of grant funds is for public housing maintenance.
The Council asked that we bring a proposal for how the Town might develop a comprehensive 15-year capital improvements program that would identify all Town capital needs and result in a funding schedule determined by the Council. Below we outline elements to consider in thinking about such work. We believe that such a plan could be developed over a period of several years, or faster if greater resources were allocated by the Council.
Process Assumptions: In preparing this outline of suggestions, we have assumed that the process of developing a 15-year capital improvements program would be a normal Chapel Hill process in every respect, with a collegial effort by the staff, early and significant participation by advisory boards and citizens in every important step, and strong guidance by the Council. We have not detailed process here out of a desire to keep the focus on the main points of discussion.
Inventory of Needs. We believe that development of such a program could include an inventory of needs in a wide variety of categories, such as those outlined below:
·
Infrastructure:
Stormwater
Streets
Curb and gutter
Sidewalks
Bikeways
Traffic signals
Street lighting
Street name signs
Regulatory and information signs
Traffic calming
Entranceways
Street trees
Landscaped areas
·
Public Use Facilities:
Community meeting spaces
Parks
Greenways
Open spaces
Recreation and cultural facilities
Indoors
Outdoors
Library facilities
Public parking lots and decks
Public housing
Offices
Employee support facilities
Maintenance and storage areas
· Public Offices and Operations Facilities:
Town Council facilities
Public meeting rooms
General administrative offices, storage, etc. for all services
Police headquarters and substations
Training facilities
Fire headquarters and stations
Training facilities
Public works facilities
Offices
Employee support facilities
Maintenance, repair and fabrication facilities
Equipment, vehicles, machines and tools storage
Materials handling and storage areas
Fuel dispensing
Transit operations facilities
Administrative offices
Maintenance facilities
Employee support facilities
Vehicle storage
Fuel dispensing
· Communications and Technology:
Town electronic network
Computing
Data, voice and image transmission
Town internet service site
Geographic information system
Traffic monitoring
Emergency communications systems
Voice, data and image
· Utilities by Others:
Electricity
Natural Gas
Water
Sewer
Voice, data, and image transmission
Needs Assessment Priorities: With such a long list of possible inventory tasks, we believe that priorities should be established to guide the work of developing a new 15-year plan in the most efficient way. It would be reasonable, for example, to accept the capital improvement programs of the various utilities serving the community as a given that requires no immediate attention from the Town.
We note, too, that the Council already has set in motion certain work that could give further guidance for the priority of needs assessment work, including:
· The draft comprehensive plan
· Authorization of a parks and recreation master plan
· The library needs assessment Task Force report and authorization of a follow-up action plan
· The work of the Town Technology Committee
· The 25-year transit assessment report
· The greenways master plan
· Exploratory work to develop a stormwater management utility
· Participation in development of the 2025 regional transportation plan
· Regional and state transportation improvement program priorities
· Search for a site for Town operations now located on University property
· Development of a conceptual plan for the Homestead Park pool and community center
· Draft results of the first five Town buildings assessment reports
We believe that the staff could prepare a draft proposal for needs assessment priorities as a next step in developing a longer-range capital improvements program, taking into account the work already authorized by the Council. The Council, assisted by advisory boards if desired, could review the staff proposal and determine priorities for needs assessment. With instructions from the Council about priorities, the staff then could prepare specific proposals for how to assess and project needs in each capital improvement category.
Projecting Capital Needs: The nature of work involved in projecting capital needs will vary considerably from one category to another. Some elements of a 15-year capital improvements program already are well-developed.
For example, the Town already has a well-developed greenways master plan that identifies present facilities and those needed in the future. Little work remains to be done in this category of needs assessment.
We expect to have a well-developed parks and recreation master plan within the next year, because of work already authorized by the Council. And, the library master plan will become more specific about capital needs when the next phase of work is completed.
Much work has been done to determine transportation needs, including needs for public transit, sidewalks, bikeways, and streets, and this work continues.
We also have begun the buildings condition assessment authorized by the Council in the present budget. Our consultant now is completing reports on the Old Post Office, the Hargraves Center, A.D. Clark Pool and bathhouse, the IFC Shelter at the old Town Hall, and the Hamilton Road Fire Station. We attach a copy of the preliminary assessment for the Old Post Office as an example of the level of detail involved in a full building assessment.
The building assessment process now is scheduled to be completed over about a 7-year period at a total cost of about $70,000. We have scheduled the work so that the buildings in greatest need of renovation are to be evaluated first. The remaining assessments could be completed in one year at a cost of about $45,000 in addition to the $10,000 of cost this year.
Perhaps the most challenging aspect of assessing capital needs would be determining the need for new facilities to serve a larger population or to meet new community needs. The Comprehensive Plan will provide useful information for the purpose of projecting such future needs.
Identified needs could be added to the capital improvements projection as they become clear from research, community review and Council determination. The needs projection would become a 15-year capital improvements program, however, only after a funding schedule is determined by the Council.
Determining a Funding Schedule: One of the Council’s most challenging tasks each year is development of a budget that addresses the community’s needs within what the Council determines is a reasonable total cost. Creation of a realistic 15-year capital improvements program with funding mechanisms and a schedule would to the annual budget development challenge.
Earlier identification of needs, as would be provided by a 15-year projection, would aid the Council in determining priorities for funding and would allow a longer period to put funding in place. The longer projection period might also result in recognition of opportunities before they are lost.
We recommend that the Council consider the ideas raised in this report at a budget work session and give the Manager instructions about further work desired by the Council.
ATTACHMENTS
1. 1999-2004 Capital Improvements Program
2. Asset Narrative of the Post Office/Court Building