Title
To discuss and consider a recommendation to the City Council on the 5-year Capital Improvement Plan for FY 2014 - 2018
Summary
Per the City Charter and the Code of Ordinances, the Planning and Zoning Commission shall annually submit a 5-year Capital Improvement Plan to the City Council and City Manager, at least 120 days before the beginning of the budget year. The plan must list projects in order of preference with a recommendation for the year of construction for each project.
There are different funding mechanisms for capital improvement projects; two of which are Certificates of Obligation (CO) and General Obligation (GO) bonds. A Certificate of Obligation (CO) is a bond secured by property tax in which does not require voter approval. Unlike a CO, a General Obligation (GO) bond is required to be approved by the voters, and the debt service typically placed on top of the tax rate. Historically, the City has used Certificates of Obligation (CO’s) to fund roadway, drainage, sidewalk and park projects while the debt service is absorbed through the tax rate. Utility projects are typically funded by the Utility Fund, capital recovery fees (impact fees from new development) and CO’s. Utility CO’s are funded through utility revenue guaranteed by the tax rate.
In past years, the City issued CO’s for the construction of roadways. While the current roadway projects are being funded by past CO issuances, staff does not recommend this funding mechanism for future roadway CIP projects. The General Fund 5-year pro forma does not propose additional issuances of CO’s for roadways for the next 5 years. The Utility Fund has multiple funding sources such as impact fees and CO’s that can be used for utility purposes.
The proposed water and wastewater utility projects referenced in the proposed 5-YR CIP total approximately $42 million dollars. It is important to note that the construction of the utility projects will require additional funding aside from Utility Fund Balance and capital recovery fees. The City will need to issue bonds for the construction of these projects.
Staff Recommendation
Staff recommends that the City pursue the funded street projects through construction for Colorado Sand Drive (TIRZ), Kelly Lane Phase 1A (TIRZ), and Pflugerville Farm Lane. While the City may pursue these roadway projects, the construction of any additional City or Travis County roadway projects will remain on-hold until additional funding becomes available to complete them. Thus, staff recommends the development of a bond program be evaluated for the listed unfunded roadway projects referenced in the staff report that are currently under design or potential projects. Also, staff recommends the 5-YR Utility CIP as provided in the staff report.
Please note, these recommendations are based on evaluated needs and do not reflect a fiscally constrained Capital Improvement Plan; rather they fulfill the requirement that the Commission provide a project list in order of preference with a recommendation for year of construction.
Prior City Council Action
N/A
Fiscal Impact
N/A
Drafter
Trey Fletcher, AICP
Assistant City Manager