2.
Council Work Session
- Meeting Date:
- 12/07/2020
- TITLE
- FY22-26 Capital Improvement Plan
- PRESENTED BY:
- Andy Zoeller
- Department:
- Finance
RECOMMENDATION
Staff recommends that City Council review the FY22 Capital Improvement Plan (CIP), discuss projects, and make recommendations to staff for desired changes to the draft CIP. Recommended modifications to the draft CIP will be made by staff for adoption by City Council on 12/21/2020.
BACKGROUND (Consistency with Adopted Plans and Policies, if applicable)
Each year the City of Billings adopts a 5-year Capital Improvement Plan (CIP). This plan identifies capital projects, prioritizes City facility and infrastructure needs, and helps develop sound financial investments into the future to ensure successful completion of projects. Capital projects included in the plan exceed $25,000 and have a useful life of greater than 1 year. Common repairs and maintenance items are not included, unless the improvements significantly lengthen the useful life of the asset.
The CIP contains information on each project, sets a timeline and priority for each project, and identifies a planned funding source. The projects that are identified as FY22 projects will be incorporated into the next City budget and rate recommendations will be made based upon the adopted CIP. While the City Council may have questions or direction on any portion of the Draft CIP at this Work Session, the Council at its November 16 Work Session specifically identified the topics of Park projects across the City and residential street projects in the South Billings Boulevard Urban Renewal District identified in the draft CIP as topics for follow up. Staff has provided the brief summaries of these two topic areas below for discussion at this meeting.
Park District 1 CIP Projects
In 2017 the City Council adopted a Parks Master Plan. This master plan identified over $22 million of projects to “maintain what we have”. The master plan also identified $55 million in “visionary projects” or future development. Currently the city only has two methods of addressing park needs. One option is to use General Fund tax revenues and the other is Park District 1 revenue. Regardless of which method is used to fund park deficiencies, project priority must be established as there is not enough funding to address all needs that have been identified.
Due to the significant cost that exists to “maintain what we have”, as well as the expressed desire of Council at the November 16th work session, Parks staff is recommending that the 2022 Capital Improvement Plan only contain dollars for the repair and replacement of existing assets. This means the removal of investments that include new construction. Specifically, the removal of the event pavilions at Centennial and Castle Rock totaling $1 million. Both Centennial Park and Castle Rock Park master plans have identified an event pavilion as part of the park, but since they are new construction, Parks staff is recommending that these projects be delayed until funding for new construction is available.
The remaining projects to be funded with Park District 1 assessments will be for replacement and improvement of existing infrastructure. Significant investment is planned for playground replacements, irrigation improvements, facility improvements, and road, parking lot, and trail paving.
Street Improvement – Unimproved Streets Projects
Currently, when the City performs major neighborhood street improvements the projects are paid for by the local neighborhood that benefits from the improvement. This is done using the creation of a Special Improvement District, and costs are assessed to the benefited properties. This funding mechanism has been used in order to allow city-wide street assessments to be used on arterial and collector streets, which benefit the general public more than individual neighborhoods.
However, in the case of the unimproved neighborhood streets in the South Billings Boulevard Urban Renewal District (SBBURD), the South Billings Urban Renewal Association (SBURA) is recommending that City Council use tax increment dollars to fund the entirety of improvements on the neighborhood streets within the district. While using tax increment dollars to fully fund the paving of streets is an allowed use of tax increment funds, it is a departure from how neighborhood street improvements are performed elsewhere in the City. Additionally, using tax increment dollars to fund neighborhood streets will limit the number of other projects that can be completed within the district. There are approximately $10 million in improvements to neighborhood streets that need to be made within the district.
Originally staff recommended an SID that split the construction cost equally between property owners and tax increment funds. Staff still thinks it is important for all property owners to have some cost share in their streets, but ultimately it is Council’s decision. There have been SIDs created throughout the City across all types of properties, including areas with lower property values (Wanigan Subdivision). As Council works through their decision-making process, staff thinks it is important to consider the following items:
The CIP contains information on each project, sets a timeline and priority for each project, and identifies a planned funding source. The projects that are identified as FY22 projects will be incorporated into the next City budget and rate recommendations will be made based upon the adopted CIP. While the City Council may have questions or direction on any portion of the Draft CIP at this Work Session, the Council at its November 16 Work Session specifically identified the topics of Park projects across the City and residential street projects in the South Billings Boulevard Urban Renewal District identified in the draft CIP as topics for follow up. Staff has provided the brief summaries of these two topic areas below for discussion at this meeting.
Park District 1 CIP Projects
In 2017 the City Council adopted a Parks Master Plan. This master plan identified over $22 million of projects to “maintain what we have”. The master plan also identified $55 million in “visionary projects” or future development. Currently the city only has two methods of addressing park needs. One option is to use General Fund tax revenues and the other is Park District 1 revenue. Regardless of which method is used to fund park deficiencies, project priority must be established as there is not enough funding to address all needs that have been identified.
Due to the significant cost that exists to “maintain what we have”, as well as the expressed desire of Council at the November 16th work session, Parks staff is recommending that the 2022 Capital Improvement Plan only contain dollars for the repair and replacement of existing assets. This means the removal of investments that include new construction. Specifically, the removal of the event pavilions at Centennial and Castle Rock totaling $1 million. Both Centennial Park and Castle Rock Park master plans have identified an event pavilion as part of the park, but since they are new construction, Parks staff is recommending that these projects be delayed until funding for new construction is available.
The remaining projects to be funded with Park District 1 assessments will be for replacement and improvement of existing infrastructure. Significant investment is planned for playground replacements, irrigation improvements, facility improvements, and road, parking lot, and trail paving.
Street Improvement – Unimproved Streets Projects
Currently, when the City performs major neighborhood street improvements the projects are paid for by the local neighborhood that benefits from the improvement. This is done using the creation of a Special Improvement District, and costs are assessed to the benefited properties. This funding mechanism has been used in order to allow city-wide street assessments to be used on arterial and collector streets, which benefit the general public more than individual neighborhoods.
However, in the case of the unimproved neighborhood streets in the South Billings Boulevard Urban Renewal District (SBBURD), the South Billings Urban Renewal Association (SBURA) is recommending that City Council use tax increment dollars to fund the entirety of improvements on the neighborhood streets within the district. While using tax increment dollars to fully fund the paving of streets is an allowed use of tax increment funds, it is a departure from how neighborhood street improvements are performed elsewhere in the City. Additionally, using tax increment dollars to fund neighborhood streets will limit the number of other projects that can be completed within the district. There are approximately $10 million in improvements to neighborhood streets that need to be made within the district.
Originally staff recommended an SID that split the construction cost equally between property owners and tax increment funds. Staff still thinks it is important for all property owners to have some cost share in their streets, but ultimately it is Council’s decision. There have been SIDs created throughout the City across all types of properties, including areas with lower property values (Wanigan Subdivision). As Council works through their decision-making process, staff thinks it is important to consider the following items:
- Using only tax revenues for neighborhood street construction and improvement is a departure from how other residential street projects are funded within the City
- How will future residential street improvements be paid for within the SBBURD or other urban renewal districts?
- The South Billings Master Plan (a companion document to the District’s Urban Renewal Plan that was adopted by City Council) identifies Special Improvement Districts as possible funding sources for street improvements and discusses formulation of an SID Policy to guide SID application in street improvement projects.
- What other South Billings projects might be delayed or not completed during the life of the District in order to use only tax increment dollars for these street projects?
ALTERNATIVES
City Council may:
- Approve,
- Modify or;
- Disapprove
FISCAL EFFECTS
The total investment in projects for FY22-FY26 are estimated to cost $424,378,550. Projects are funded through a variety of sources including user fees and charges, debt financing, special assessments, grants, tax revenues, and state revenues. The projects included for FY22 total $163,069,328.
Total projects investments are planned in the following areas over the next 5 years:
Total projects investments are planned in the following areas over the next 5 years:
| Project Category | |
| Airport Projects | 36,072,222 |
| Facilities Projects | 16,200,000 |
| Fire Projects | 3,000,000 |
| MET Transit Projects | 890,000 |
| Parking Projects | 610,000 |
| Park Projects | 8,519,000 |
| Recreation Projects | 27,350,000 |
| Solid Waste Projects | 10,795,000 |
| Storm Projects | 13,200,000 |
| Transportation Projects | 104,842,328 |
| Utilities Projects | 202,900,000 |
| Total 5 Year CIP | $424,378,550 |