[Archived] What are the recommended capital project investments for an additional second and third cent on the real property tax rate?

The City Manager’s FY 2017 proposed budget includes a one-cent increase in the real estate tax rate. At their March 15, 2016 meeting to set the maximum tax rate for calendar year 2016, City Council set the maximum increase at three cents and directed the City Manager to provide options for investing the additional two cents on capital projects. The addition of two cents on the real property tax rate would provide an additional $7.6 million in revenue in FY 2017 and $3.8 million from the second real estate tax payment of FY 2016 for a total of $11.4 million, of which $1.1 million would be required to comply with the City’s policy of retaining 10% of revenue in fund balance and $10.2 million would be available as cash capital funding for projects.

Staff recommends applying two-thirds of the additional revenue ($6.8 million) as cash capital to fund City transportation, facilities and broadband projects and using one-third ($3.4 million) to fund the ACPS approved Pre-K Center through a combination of cash funding and borrowing. ACPS projects represent approximately one-third of the FY 2017 CIP (excluding the Potomac Yard Metrorail station). The projects listed in the following table represent the City Manager’s recommendation for additional investment should Council choose to fund additional capital projects in FY 2017. 
 

*In addition, $5.172 million would be borrowed to fund the total $8.3 million needed to fund the retrofitting of the leased space. 

Additional Complete Streets Funding ($0.7 M)

Approximately $730,000 of additional one-time funding could be allocated to Complete Streets, specifically for residential sidewalk programs for qualifying streets, roadway resurfacing sidewalk projects, and priority projects as recommended in the Pedestrian and Bicycle Master Plan. While the Complete Streets program has more demand than $730,000 would fund, T&ES staff capacity limits the amount of funds that could be planned in FY 2017.

Additional Funding for Court House Renovations and HVAC Replacement ($2.3 M)

An additional $2.3 million in FY 2017 could be utilized to fund one-time high priority capital replacement items identified in the Facility Condition Assessment including replacement of exterior doors and aluminum windows; replacement of unit heaters and heat pumps; renovation of public access restrooms; and partial funding for the replacement of some of the $7 million in Courthouse HVAC systems and controls capital replacement requirements identified in the Facility Condition Assessment. They would have no ongoing operating costs and could save in future maintenance costs.

Additional DASH Replacement Bus Purchases ($1.4 M)

Funding would allow for the purchase of two additional DASH buses, as part of the DASH Bus Fleet Replacement CIP project. This project’s funding is used to replace aging vehicles in the DASH Bus Fleet.

Energy Retrofit of City Facilities ($0.5 M)

An additional $450,000 in FY 2017 could provide for one-time lighting retrofits at eight recreation center gymnasiums to high-efficiency LED technology to reduce energy use and costs, and enhance lighting quality and reduce maintenance costs; and perform a retro-commissioning process for one City-owned facility to enhance HVAC system performance, reduce energy use and costs and improve occupant comfort.

Gadsby’s and Apothecary Museums Facility Repairs ($1.0 M)

An additional $1.0 million in FY 2017 could accelerate the one-time funding required to address a portion of the capital replacement and maintenance items identified in the Facility Condition Assessment at the Gadsby’s Tavern, Gadsby’s Tavern Restaurant and Apothecary Museum. These capital replacement and maintenance items include the replacement of exterior doors; renewal of facility brick and wood; replacement of wiring required for lighting and other equipment; painting of walls and ceilings; and refinishing floors. They would have no ongoing operating cost and could save in future maintenance costs.

Additional Street Reconstruction and Resurfacing Funding ($0.6 M)

Additional funding would be dedicated to paving projects to accelerate the FY 2018 paving schedule. The State has indicated it may reduce Revenue Sharing funding for localities in FY 2018 – 2026. This additional $570,000 would help pave FY 2018 City Street Reconstruction and Resurfacing projects that might otherwise be reduced or eliminated in FY 2018 due to the reduced State funding.

In addition to this funding, staff is also recommending an additional $850,000 of identified FY 2017 savings from the WMATA Capital Contribution for a total of $1.4 million in additional Street Reconstruction and Resurfacing funding in FY 2017.

Additional Funding for Municipal Broadband Engineering ($0.4 M)

With an additional $400,000, FY 2017 funding for the Municipal Fiber project would total $800,000. This would provide adequate one-time funding to continue the business plan study and to conduct engineering/design work, in preparation for the construction of a fiber optic backbone that would serve all City and ACPS buildings, the City’s public safety radio network, and potentially City residents and businesses as well as avoid future costs by no longer leasing fiber from the private marketplace.

Retrofit of Leased Facility for ACPS Pre-K Center ($8.3 M)

This project would be funded through a mix of borrowing and cash capital. Debt service on this additional issuance would total $0.3 million in FY 2017.

Funding could be used to retrofit a leased space to house the enrollment of pre-K students in a centralized facility. This funding would cover the retrofit of a leased space with a capacity of at least 360 early childhood Alexandria students. Housing these pre-K students in a leased space creates capacity for additional classrooms in ACPS facilities that currently house early childhood students. This project was not recommended for funding in FY 2017 of the City Manager’s Proposed Capital Improvement Program (CIP) due to the very early stage of planning and outreach required before construction could begin (see FY 2017 Budget Memo #3), however, funding for the lease cost ($0.7 million) is included in contingency in the City Manager’s Proposed FY 2017 Operating Budget should City Council wish to fund the Pre-K center. There would be an ongoing operating cost in FY 2018 and beyond associated with this project including the continuing cost of the lease and expanded staffing. 

Use of Funding Beyond FY 2017

City Council only needs to identify use of the funds generated by the additional two cents on the tax rate for FY 2017. Staff will plan to program these funds as cash capital for projects related to transportation, ACPS, and City facilities in future years of the Capital Improvement Program.