Capital Improvement Plan (CIP) - Draft

2022-2032 Capital Improvement Plan (CIP) - Draft

What is a Capital Improvement Plan - Draft

The Capital Improvements Plan (CIP) - Draft serves as an effective guide for the efficient and effective provision of public facilities, outlining timing and financing schedules of capital and infrastructure projects for a ten-year planning period, and for the next fiscal year capital budget. The CIP - Draft neither appropriates funds nor authorizes projects. The City Council must act to initiate each project. Proceedings to initiate capital improvements are presented when sources of funding are available.

Staff performs a systematic evaluation of capital project requirements, identifies any project changes, incorporates recommended changes, and submits the revised Plan to the City Council for consideration each year. Modification and adoption is part of the annual budget process.

Financial Plan - Capital Improvement Plan - Draft

Annually, the city undertakes a wide variety of infrastructure projects ranging from water/sewer pipe installation to paving of city streets. The same goes for the funding of these projects, with an assortment of funding sources from levying of property taxes to federal appropriations. A constant challenge for the City staff is trying to find resources beyond property taxes to help with maintaining and enhancing the City's infrastructure while lessening the burden on Windsor Heights' taxpayers.

When discussing a financial plan for the CIP - Draft, the issuing of debt to cover project obligations is always a critical factor. The financial plan uses a method of 3 & 8 year infrastructure bonds for permanent financing. The following summary provides a breakdown for each major funding category the City uses to provide resources for projects. Following the summary please refer to the attachments for a detailed view of financing for each CIP - Draft project, followed by an analysis from Independent Public Advisors on the impact of the financial plan of the City's debt service levy.

Property Tax

Property taxes, specifically those collected via the City's debt service levy, is the largest source of traditional revenue for the proposed CIP - Draft, representing about $4.8million of 34% of the overall financial plan. property tax revenue is used to make the principal and interest payments for any general obligation (GO) debt issued by the City to pay for infrastructure projects. There are five types of GO debt issued by the City, with all types of baked by the full faith and credit of the City's taxing authority:

  1. Regular GO debt — debt service levy only
  2. Water-abated GO debt —  reimbursement received from the City's water fund
  3. Sewer-abated GO debt—  reimbursement received from the City's sewer fund
  4. Storm-abated Go debt —  reimbursement received from the City's stormwater fund
  5. Tax increment financing-abated GO debt —  reimbursement received from capturing taxes paid to all taxing authorities on certain new commercial & industrial properties
  6. Referendum approved GO debt —  additional debt service levy authority for capital projects approved by a vote of a super-majority (60%) of Windsor Heights' taxpayers.

Tax Increment Financing (TIF)

The use of tax increment financing (TIF)is a way for the City to allow for growth, specifically commercial & industrial growth, and pay for itself. a portion of taxes generated from the TIF District is "capture" by a municipality and used specifically to encourage new development.

Road Use Tax

Road Use Taxes, specifically collected for the maintenance, repair, and construction of road, is a traditional source of revenue used for the proposed CIP.

Grants, Intergovernmental and Miscellaneous Revenues

Every year City staff looks for opportunities outside of the normal funding mechanisms (property tax and utility rates) to assist with the construction of infrastructure projects. These opportunities can include awards of federal and state grants, regional resources, or assistance from other taxing bodies. The proposed CIP financial plan identifies opportunities to receive grant awards or intergovernmental assistance; however, at this time the City staff cannot rely on this revenue source. Grants will undoubtedly be explored and if grants have either been applied for already and we are waiting on award announcements, or the City anticipates making future applications for the funding, future CIP's may identify this as a more reliable source. The City works with neighboring jurisdictions on multiple projects.