AGENDA #1b

 

MEMORANDUM

 

 

TO:                  Mayor and Town Council

 

FROM:            W. Calvin Horton, Town Manager

 

SUBJECT:            Preliminary Report on the 2001-2016 Capital Improvements Program

 

DATE:             March 28, 2001

 

 

We are pleased to transmit the Preliminary Report on the 2001-2016 Capital Improvements Program.

 

The attached resolution would refer the document to the Town’s Bicycle and Pedestrian Advisory Board, Community Design Commission, Greenways Commission, Historic District Commission, Historic District Commission, Housing and Community Development Advisory Board, Library Board, Parks and Recreation Commission, Planning Board, and Transportation Board for their review and recommendations.  Recommendations from these advisory boards would be included in the Council’s materials for the May 9, 2001 public hearing.

 

INTRODUCTION

 

The Capital Improvements Program in past years has identified capital projects that may be funded in five or fewer years.   Last year, we began the process of developing a fifteen year Capital Improvements Program by including long-range capital project planning.  This year, we have made the transition to a fifteen-year program, and present a schedule of proposed projects for the years 2001-2016.  We appreciate the direction of the Council in asking us to prepare a fifteen-year plan, and providing funds for the Town to undertake an assessment of the condition of Town buildings. 

 

The Capital Improvements Program is a financial plan for the Town’s major capital and infrastructure needs.  Drawing from the 2000 Facility Condition Assessment, special studies, the Comprehensive Plan, and Council, citizen and staff ideas, the Capital Improvements Program identifies capital needs, establishes priorities, identifies potential funding sources, and includes needs for which sources of funding have not been identified.

 

The Capital Improvements Program is comprehensive in scope.  It includes all identified capital projects and a range of funding sources.  It includes projects that are funded through the Town’s capital repair and maintenance fund, and also those projects that are funded through bonds, State and federal grants, and other sources.  However, the Capital Improvements Program does not include the capital needs of the school system, the Orange Water and Sewer Authority, or the solid waste management program, which was transferred to Orange County in 1999.

 

This year’s program focuses directly on the repair of major Town facilities, using the 2000 Facility Condition Assessment as a guide. In fact, of the 45 items proposed for funding by the Capital Improvements Program  (CIP) Fund (Table 1), only three projects, Municipal Operations Site Acquisition (line 16), Sidewalk and Bicycle (line 31) and Greenways (line 43), represent new construction.  The remainder of the proceeds of General Obligation Bonds approved in 1996 fund seven new projects and six renovation and repair, as noted on Table 2; and federal and State grants and County bond funds support three other new projects and two renovations, as noted in Tables 3 and 4.

 

The 45 items proposed for funding by the CIP Fund do not include all identified repair and renovations needs.  However, we have constrained the proposal to a total which we believe could be funded considering the challenges of the coming year.  Please see the status report on the budget for a broader discussion of funds available.

 

To address deferred maintenance needs as much as possible, we have relied on installment financing over ten years to pay for immediately needed capital maintenance projects.  We believe installment financing is an efficient method of capital financing that saves money by preventing further deterioration and reducing the need for future deferred maintenance.  It also is an equitable means, because it allows future beneficiaries of the projects to contribute to the cost.

 

Last year, we identified five such installment projects that financed a total of $1,355,000 in deferred capital maintenance costs.  This year, we identify six additional projects for installment financing.  By undertaking these projects in the Plan, we hope to reduce or eliminate the accumulation of deferred maintenance needed in future years.  We also have programmed capital maintenance items over the next 15 years which, if done on a cyclic basis, should also contribute to the elimination of future backlogs of deferred maintenance.

 

We note a few items not in the Preliminary Report.  Energy-efficiency projects as a project category has been eliminated because energy-efficiency improvements are included within the individual capital maintenance project cost estimates.  The project category of Extraordinary Maintenance is retained at lower levels of funding to continue a smaller sum for unspecified, unprogrammed or emergency repair projects that arise periodically.  In addition, the dog park under consideration by the Council on March 26, 2001, is not included pending further guidance from the Council after that discussion.

 

SUMMARY OF THE PROPOSAL

 

The Preliminary Report provides a summary of the proposed Capital Improvements Program for the years 2001-2016.  In developing the program, we used a set of priority ranking criteria to evaluate projects (please see Attachment 1).  The highest priorities are given to those projects which have a Council mandate for funding, those which are needed to meet a legal requirement, those for which we have a contractual agreement, and those that would repair existing facilities.  We have also noted whether each project is a Maintenance, Improvement, or Expansion Project.

 

The Preliminary Report consists of four tables:

 

Proposed 2001-2016 Capital Improvements Program – Capital Fund:  Table 1 includes a projection of a recommended funding level of $1,035,000 over the fifteen year period.  We have assigned priorities to each project, and have identified whether each project is a Maintenance, Improvement, or Expansion item.

 

This table includes a summary of the current year Capital Improvements Program for 2000-2005.  The current year includes five renovation projects that the Council approved for ten-year installment financing.  These buildings are the Interfaith Council Shelter building on West Rosemary Street, the Old Post Office facility on East Franklin Street, the Glenwood Fire Station, Hargraves Center, and the A.D. Clark Pool and Bathhouse.  Total renovation costs are budgeted at $1,355,000, including funds for architectural/engineering costs and contingency.

 

The table then provides a projection of additional capital needs over a fifteen year period, with an emphasis on correcting deferred capital maintenance items, and future capital maintenance items identified in the 2000 Facility Condition Assessment. 

 

Proposed 2001-2016 Capital Improvements Program – Bonds:  Table 2 lists projects being funded by the 1996 bond projects, as adopted by the Council on September 8, 1997. 

 

Proposed 2001-2016 Capital Improvement Programs – Other Funds:  Table 3 lists capital projects funded by grants or other sources for which funding is available or anticipated.

 

Unfunded 2001-2016 Projects:  Table 4 lists other capital repair and maintenance projects listed in the 2000 Facility Condition Assessment, or submitted by Departments, which are not recommended for funding in this preliminary recommendation.  We also include for each project its priority rating, and whether each project is a Maintenance, Improvement, or Expansion item.  This table also includes projects which could be funded with potential future grant sources.

 

The plan proposes that $1,035,000 annually be allocated for capital projects.  Of this amount, $970,000 is projected to be available from the General Fund, and $55,000 is revenue from cell tower leases. 

 

This year’s Capital Improvements Program will include reappropriated funds from previous program years.  Reappropriations will be recommended as the current fiscal year progresses and projects are completed or scheduled.  These funds will be included in the Manager’s Recommended Capital Improvements Program to be presented on April 23rd.

 

We note that the tables do not include funding for purchase of land recently authorized by the Council for development of a replacement public works facility.  Funding for this purchase is taken into account in the preliminary budget report, however, and will be incorporated in the final proposal for the Capital Improvements Program.

 

 

 

DESCRIPTIONS OF PROJECT CATEGORIES

 

Following is a description of each project category included in the Preliminary Capital Improvements Program:

 

Municipal Operations Facilities:  This category includes improvements to buildings owned, occupied, and maintained by the Town of Chapel Hill for the general services of government.  It also includes funding for continuing assessments of building conditions on a five year cycle,  and  a study of needs for future municipal operations space.

 

Town Facilities Leased by Others:  This category includes improvements to buildings which the Town owns and leases to other entities, such as the IFC Shelter, public housing and the Chapel Hill Museum.

 

Infrastructure:  This category deals with improvements to Town infrastructure, such as bridges, sidewalks, drainage, bike paths, and cemeteries.

 

Communications and Technology:  This category includes projects which support the communications, technology, and information functions of the Town.

 

Parks and Other Public Use Facilities:  This category includes projects which relate to buildings or facilities which are used by the public, such as parks, greenways and the library.

 

PUBLIC FORUM COMMENTS

 

On January 23, 2001, the Council held its first public forum on the budget and capital program needs.  Citizens requested the following projects:

 

·        Additional Funding for Sidewalks:  Bicycle and Pedestrian Advisory Board Chair Dorothy Verkerk proposed the Council consider tripling its budget for sidewalks and intersections, to $300,000 for years one and two, and $375,000 for years three, four and five.

 

Staff Comment:  We propose to gradually increase the amount of capital funds for sidewalk/bicycle facilities, and to use a portion of these funds as a local 20% match to leverage surface Transportation Programs Direct Allocation funds.  We propose to request additional Direct Allocation Funds from the Durham-Chapel Hill-Carrboro Metropolitan Planning Organization for this purpose this year.

 

·        Culbreth Park Playground Equipment:  The Culbreth Park Homeowners Association requested a small play structure in the Culbreth Park neighborhood.

 

Staff Comment:  This proposal could be funded out of the Small Park Improvements category in the current year.  We will consider whether funds may be available for this purpose in developing the recommended Capital Improvements Program for Council’s consideration on April 23rd.  At that time, we will have an estimate of current year funds not being used for other purposes, and available for reappropriation.

 

FUTURE STEPS

 

The Manager’s Recommended Capital Improvements Program will be submitted to the Council on Monday, April 23rd.  On Wednesday, May 9, 2001, a public hearing will be held to receive citizen comments on the Recommended Capital Improvements Program.  The Town Council is scheduled to consider adopting the proposed budget and Capital Improvements Program on Monday, June 11, 2001.

 

The Council requested a report on alternate mechanisms for funding capital improvements.  We plan to provide a report on this topic for consideration at the April 4, 2001 budget work session.

 

RECOMMENDATION

 

We recommend the Council adopt the attached resolution referring this document to Town advisory boards.

 

ATTACHMENT

 

1.      List of Priority Categories (p. 7).

 

TABLES

 

1.      Proposed 2001-2016 Capital Improvements Program:  Capital Fund (p. 8).

2.      Proposed 2001-2016 Capital Improvements Program:  Bonds (p. 9).

  1. Proposed 2001-2016 Capital Improvements Program: Other Funds (p. 9).

4.      Unfunded 2001-2016 Projects (p. 10).

 


A RESOLUTION REFERRING THE PRELIMINARY REPORT ON THE CAPITAL IMPROVEMENTS PROGRAM (2001-03-28/R-1)

 

WHEREAS, the Council of the Town of Chapel Hill has received a Preliminary Report on developing a 2001-2016 Capital Improvements Program;

 

NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council hereby refers the Preliminary Report for comment and recommendations to the following advisory boards: 

 

·        Bicycle and Pedestrian Advisory Board;

·        Community Design Commission;

·        Greenways Commission;

·        Historic District Commission;

·        Housing and Community Development Advisory Board;

·        Library Board;

·        Parks and Recreation Commission;

·        Planning Board; and

·        Transportation Board.

 

BE IT FURTHER RESOLVED that the Council requests that the advisory boards complete their review and recommendations for consideration at the Council Public Hearing on Wednesday, May 9, 2001, regarding the Budget and Capital Improvements Program.

 

This the 28th day of March, 2001.


ATTACHMENT 1

 

PRIORITIES FOR SELECTING CIP PROJECTS

FOR CAPITAL IMPROVEMENTS FUNDING

 

 

 

Priority #1:            Projects that have a Council mandate.

 

 

Priority #2:           Projects that we have a legal requirement to perform or

complete.

 

 

Priority #3:           Projects for which we have a binding contractual agreement.

 

 

Priority #4:          Projects that would repair or maintain existing Town facilities/infrastructure above and beyond ordinary maintenance.

 

 

Priority #5:           Projects involving public safety.

 

 

Priority #6:           Projects which are part of an adopted master plan.

 

 

Priority #7:           Other projects.