FY2023-FY2028 Adopted Capital Improvement Program

FY2023 Adopted Budget Capital Improvement Program

Introduction

Capital Improvement Program Policy The Capital Improvemen t Program (CIP ) is a schedul e of publi c improvement projects planne d b y Count y Government to occur ove r a six year period and includes project descriptions , estimate d costs , and sources of funding . Th e Capital Budget is the first yea r of th e CI P an d includes those projects fo r which funds have been appropriated . A capital project in th e CIP shall establish certain characteristic s includin g value , useful lif e an d overall contribution t o the Count y infrastructure . Th e project will hav e an estimated individual cost totalin g $100,000 o r more . Eligibl e capital costs will include Land Acquisition, Sit e Improvements , Planning , Design , Construction, Inspection/Overhead, Technolog y Equipment/Infrastructure , Capital an d Non Capital Equipment/Vehicles (related t o start up costs o r comprehensive replacement plan), and Project Management . Thes e costs will b e liste d in current dollars and update d annually . A Capital Improvements Progra m Committe e shall b e established and managed b y th e Budget Office. The y will evaluate th e merits of each requeste d project and recommen d to the Count y Executiv e what should b e included i n the Count y Executive Propose d Budget . The Count y wil l attempt to budget pay go fundin g fo r capita l improvements at an amount equal t o 7 % of General Fund operatin g revenues . All pay go sources will b e considered i n total in reachin g this goal except for direc t thir d part y donations or grants . Other capital fundin g will b e obtained b y general obligation bonds/leases , state and federal grants, enterprise fun d resources and other sources . The Budget Offic e will annuall y revie w th e County s deb t affordabilit y standards, update th e study , an d compar e t o th e County s peer group . All capital project s will b e reviewed and approved i n accordanc e with Annotated Cod e o f Maryland Land Use Articl e § 3 205 regardin g consistenc y wit h th e Count y Comprehensiv e Plan . Th e Plannin g Commissio n wil l vote o n th e consistenc y base d on th e Count y Executive s proposed budget. Debt Affordability Policy In orde r to establish a safe level of debt th e Count y commissioned a stud y which facilitate d th e establishmen t of a Debt Affordabilit y limit and wa s recentl y reviewe d an d updated i n 201 7 b y a n outside financial consultant. The authorit y fo r the issuanc e o f general obligatio n bonds is granted throug h enactment o f legislatio n b y th e Count y Council. In order to establish a saf e level of debt , the Count y commissioned a study , which facilitated the establishment o f a Debt Affordabilit y limit . This limit assists i n th e establishment of sound fisca l management policie s for the County, and helps to ensure th e maintenance, o r possibl e improvement, o f the County s credit rating. In August 2021, th e County s bond ratin g was reviewe d b y Standard and Poor s , Fitch , and Moody s Investors Service , Inc., which resulte d i n sustainin g AAA , AAA , Aa a ratings respectively.

The Debt Affordabilit y Limit s Stud y recommende d the us e of Debt Affordabilit y standards , an d th e followin g ar e bein g used:

9 General Fund G.O . debt service, as a percentage of Genera l Fund revenue, should b e limited to 9.0% 9 General Fund debt , as a percent of assessed valuation , should b e limited to 2.0% 9 General Fund debt , a s a percent of General Fund Revenue , should b e limited to 80.0% 9 Total G.O. debt service, as a percent o f General Fun d Revenue , should b e limite d t o 17.2%

The Debt Affordabilit y model assumes th e County s annual populatio n growt h rat e of 1.75%, a n assessed valuation growth rat e between 3.1 % and 3.5% , annual revenu e growt h in General Fund revenues betwee n 3.4 % an d 6.3%, and an interest rat e of 5.00 % on ne w debt.

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