Adopted Budget Projected Budget 2016-2017

Capital Improvements Program

Funding Overview

Over the next ten years, the City will continue its efforts to fund a significant portion of Water Resources projects using Pay-As-You-Go funding (using Enterprise Funds). Water Resources expects to fund $328 million of projects through Enterprise Funds, allowing the department to save on interest expenses and maintain a strong position with bond rating agencies. In addition, Water Resources estimates spending $259 million in Revenue bonds over the next 10 years.

The Capital Improvements Program relies on a variety of funding sources to accomplish its many efforts. These include debt financing; enterprise funding; general fund revenues; state shared revenues; and grants from the state government, federal government, or private sources. Through the 2006, 2008 and 2009 bond referenda, the City was authorized to issue 228.4 million in General Obligation bonds. The City also occasionally utilizes Special Obligation bonds, such as those being used to fund the City’s contribution to the Tanger Performing Arts Center. There is just over $140 million of authorized bond funding included in the CIP, including approximately $12 million of funding for completing Parks & Recreation projects, $96 million for Transportation projects, just under $4 million for Fire, and $28 million for the Tanger Performing Arts Center. Of this authorized bond funding, only approximately $65 million of General Obligation bond funding has not yet been issued, and will be issued to fund Transportation projects as outlined in the CIP. As directed by City Council, current plans are for these bonds to be issued over the next six years. Beginning in FY 16-17, an additional 1 cent of the property tax rate is being used to support debt service payment. The total property tax rate will not be impacted, but the debt service costs are increasing in FY 16-17 from about $19.3 million per year to $23.4 million, requiring that funding be reallocated from General Fund expenditures to cover the additional payments. The CIP includes approximately $597 million of Unauthorized Bond funded projects. These projects include projected needs to replace aging infrastructure, facilities, and major equipment, targeted programs to support disadvantaged or at-risk groups, new facilities based on future demand and growth, and other capital needs identified by departments for planning purposes. Highlights

Funding Sources

Other, 0.58%

Revenue Bonds, 15.89%

Enterprise Funds, 20.19%

Unauthorized Bonds 2, 6.48%

Grants, 18.01%

Unauthorized Bonds, 30.20%

Authorized Bonds, 8.65%

The City continues to seek grant funding to provide additional funding for CIP projects as opportunities allow. Total Grants funding in the CIP equates to $293 million. Grants are defined to include any funding received from the State or Federal Government that often require a local match from the City. During the 10 year planning period, Grants are projected to be available to support a variety of Transportation projects, including sidewalk construction, road projects, and transit improvements. Finally this CIP includes $9.4 million categorized as Other Revenue. Examples of Other Revenue include private donations and financing through Certificates of Participation, such as in the South Elm Redevelopment project.

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