Page 286 - City of Watauga FY22 Adopted Budget

CIP AND CAPITAL PROJECTS FUNDS

Wastewater Projects – Such projects include improvements, expansions, or construction of
wastewater lines in the City. Many of these projects are implemented to stay within EPA
Administrative Orders. These projects are included in the Water and Sewer Capital Fund.

Water Projects – Such projects include new waterlines or improvements to existing waterlines
for future development or existing customer needs. These projects are included in the Water
and Sewer Capital Fund.

Parks Projects – Parks projects improve the quality of life of Watauga residents and projects in
the Parks Master Plan such as trails and parks improvements are included in the 5-year Capital
Improvement Plan.

Accounting for CIP projects - The funds are accounted for on the modified accrual basis of
accounting. Revenues are recorded when available and measurable, and expenditures are
recorded when the liability is incurred. The Capital Projects Funds account for the acquisition
of and construction or reconstruction of major capital facilities, infrastructure, and equipment.
The projects are financed with resources allocated to the General Capital Projects Fund,
Economic Development Corporation Capital Fund, and the Water and Sewer Capital Projects
Fund.

BRIEF HISTORY OF THE CITY’S CAPITAL IMPROVEMENTS PROGRAM (CIP)

It has been the goal of the City of Watauga to have a Capital Improvements Program that is
focused on adding value and extending the life of City infrastructure with no increase in
operating costs or property tax. Consideration is given to debt issuance only if the overall tax
rate remains unchanged and to prioritizing projects that will either decrease operational costs
or have little or no operational cost impact.

❖ FY2003-FY2011, the City was focused on an aggressive facilities campaign. During this
time, we constructed a new City Hall and Animal Shelter, and upgraded facilites for the
Police and Recreation departments, along with upgrades to major streets. The new
Fire/EMS facility, was completed in FY2011, for just under $3.8 million dollars.

❖ FY2011-FY2021, the City’s focus began to move from constructing and renovating
facilities to the city’s infrastructure and the need for replacement of outdated equipment
and vehicles city-wide. In July of 2011, in order to fund future capital projects and needed
equipment, the City issued $7.365 million in Combination and Limited Pledge Revenue
Certificates of Obligation. This new issuance was designed to fund street improvements,
water and sewer and drainage projects, purchase of new equipment, vehicles, machinery,
and technology purchases. The issuance was timed to allow the City to maintain relatively
the same amount of debt as prior years for both the General Fund and the Utility Fund.
In July, 2012, the City issued $7.73 million in new debt for the utility fund. With this
issuance, the City embarked on major improvements in the City’s water and sewer
infrastructure. The projects began in FY2013 were completed in FY2018. In FY2013,

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