Translate[Archived] Question #13: If Council chose to reflect the reserved bond capacity within a contingency CIP project, what would be the most effective way to do so while reflecting the debt and cash capital impacts?
Question:
If Council chose to reflect the reserved bond capacity within a contingency CIP project, what would be the most effective way to do so? What would be the most appropriate manner to reflect the debt and cash capital impacts?
Response:
The Proposed FY 2019 – FY 2028 CIP includes a new section titled “Reserved Bond Capacity and Cash Capital Funding”. If approved as proposed, these funds allocation would be appropriated for FY 2019 expenditure like other projects except that an additional step by City Council would be required to transfer the funds from contingency to specific projects when they are ready to be spent. Over the ten-year plan, this section of the CIP includes funding for the following items:
FY 2019:
- City & School Land Acquisition and DCHS Colocation Investment – funding ($40.0 million in FY 2019, $10 million in FY 2020, and $10 million in FY 2026 – FY 2027) set aside for land acquisition opportunities and the to be determined cost to move and buildout a facility to collocate DCHS facilities.
- High School Capacity (Soft Costs) – the Task Force recommendations and School Board Approved CIP included $5.2 million for soft costs related to a new high school. This funding will remain in contingency until more definition and a timetable for this spending is available.
FY 2020 to FY 2028:
- CIP Funding (City) – funding ($13.0 million) set aside for planned projects to address potential project scope and cost changes for City facility projects.
- CIP Funding (Schools) – funding ($25.2 million) set aside for planned projects to address potential project scope and cost changes for School facility projects.
- CIP Contingency Funding (Undesignated) – funding ($16.6 million) set aside for planned projects to address potential project scope and cost changes that has not yet been attributed to City or School projects.
- Planning / Feasibility Studies - Combined City & Schools – funding ($2.1 million) set aside for out-year planning and feasibility studies to better develop capital projects and explore alternative delivery options for a project.
- Witter/Wheeler Campus (includes ACPS Transportation Facility) – funding ($35.7 million) set aside to redevelop the Witter/Wheeler Campus of City facilities and a school facility, including a Salt Storage facility, City vehicle washing facility, impound lot, School transportation facility, and other City functions housed in this area.
The Proposed CIP currently includes all of these contingency accounts as planned expenditures. Items with an identified FY 2019 cost would be part of the FY 2019 capital budget appropriation as a City Council controlled capital contingency. The monies would be allocated to an ACPS capital account at the time needed which would proceed ACPS entering into a binding decision to purchase land or the City government entering into a binding decision to lease new DCHS headquarters space.
If adopted as proposed, this would allow the City to have the requisite budget authority to approach land acquisition opportunities and DCHS relocation costs in a nimble fashion, while also maintaining the ability to make cash flow decisions in a cost-effective manner. When a land acquisition or lease opportunity does present itself, the City can then use other financial mechanisms available, like a Bond Anticipation Notes (BANS) line of credit, to fund the capital cost until the next general obligation issuance.
For each subsequent fiscal year (such as FY 2020), it is likely that each of the projects (with the exception of FY 2020 land acquisition funds) will be specifically enough defined that no reserved bond capacity will likely be needed by the time each of fiscal years FY 2020 to FY 2028 starts.