FY2022-FY2027 Adopted Capital Improvement Program

FY2022 Adopted Budget Capital Improvement Program

Introduction

Capital Improvement Program Policy The Capita l Improvemen t Program (CIP) is a schedul e o f publi c improvemen t projects planned b y Count y Governmen t to occur over a six yea r period and includes projec t descriptions , estimated costs, an d sources of funding. Th e Capital Budget is th e first year of th e CIP an d includes thos e projects for which funds hav e bee n appropriated. A capital projec t in th e CIP shal l establis h certai n characteristic s includin g value, useful lif e an d overal l contributio n t o the Count y infrastructure . Th e projec t wil l hav e an estimate d individua l cost totalin g $100,000 or more. Eligible capita l costs wil l include Land Acquisition, Sit e Improvements, Planning, Design, Construction, Inspection/Overhead, Technolog y Equipment/Infrastructure, Capita l an d Non Capita l Equipment/Vehicles (relate d to start up costs or comprehensive replacemen t plan), and Projec t Management. Thes e costs will b e liste d in curren t dollar s an d update d annually. A Capita l Improvements Progra m Committe e shal l b e establishe d and managed b y th e Budge t Office . The y will evaluate th e merits of eac h requested project and recommend t o th e Count y Executiv e wha t shoul d b e included in the Count y Executive Proposed Budget . The Count y wil l attemp t to budge t pay g o fundin g for capital improvements at a n amount equal t o 7 % o f Genera l Fun d operatin g revenues. Al l pay g o sources wil l b e considere d i n tota l in reachin g this goa l except for direc t third part y donations or grants. Other capita l fundin g wil l be obtained b y genera l obligation bonds/leases, state an d federa l grants , enterpris e fund resource s an d other sources. The Budget Offic e wil l annuall y review th e County s debt affordabilit y standards, update th e study, an d compar e to th e County s peer group. Al l capita l projects will b e reviewe d an d approved i n accordance wit h Annotated Cod e o f Marylan d Land Use Articl e § 3 205 regardin g consistenc y with th e Count y Comprehensiv e Plan . Th e Plannin g Commissio n wil l vot e o n th e consistenc y based o n th e Count y Executive s proposed budget. Debt Affordability Policy I n orde r to establish a saf e leve l of deb t th e Count y commissioned a stud y which facilitated th e establishmen t of a Deb t Affordabilit y limi t an d was recentl y reviewe d and update d i n 201 7 b y a n outside financia l consultant. The authorit y for the issuanc e of general obligatio n bonds is grante d throug h enactmen t of legislation b y th e Count y Council . I n orde r t o establish a saf e leve l o f debt , th e Count y commissioned a study, which facilitate d th e establishment o f a Debt Affordabilit y limit. This limit assists i n th e establishmen t of sound fisca l managemen t policies for th e County, and help s to ensure th e maintenance, or possibl e improvement , of the County s credi t rating. In Februar y 2018 , the County s bond ratin g was reviewe d b y Standard and Poor s, Fitch , an d Moody s Investor s Service, Inc., whic h resulte d i n sustainin g AAA , AAA, Aa a ratings respectively.

The Deb t Affordabilit y Limit s Stud y recommended the us e of Deb t Affordabilit y standards, an d th e followin g ar e being used :

9 General Fun d G.O. debt service, as a percentage o f General Fund revenue , shoul d b e limited t o 9.0% 9 General Fun d debt , as a percen t of assesse d valuation , shoul d be limite d to 2.0% 9 General Fun d debt, as a percen t o f General Fund Revenue , should b e limited t o 80.0% 9 Tota l G.O. deb t service, as a percen t of Genera l Fund Revenue , shoul d b e limited t o 17.2%

The Deb t Affordabilit y mode l assumes th e County s annua l population growt h rat e of 1.75%, a n assesse d valuation growth rat e betwee n 3.1% an d 3.5% , annua l revenu e growth i n General Fun d revenue s betwee n 3.4% an d 6.3%, and an interest rat e o f 5.00 % on new debt.

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