Page 185 - BudgetBookCover_FY26_Adopted.pdf

Capital Overview

Capital Improvements Plan

The Capital Improvements Plan includes project estimates through the year 2025 and beyond. These projects are to be funded using
a combination of General Obligation bonds, Certificates of Obligations, Revenue bonds and various cash sources. Staff has made
every effort to maintain a spending plan that allows us to fund projects while keeping our debt at a minimum. This is achieved by
using available excess resources in the operating funds for these Capital Projects.

Capital Impact on Operating Budgets

The impact of capital improvements on the operating budget are outlined when those costs are identifiable and become part of the
budget process. Projects that involve new facilities or additions to the equipment fleet receive additional appropriations only
after consideration is given to the timing of a new facility or upon arrival of new equipment. Each situation is unique. The majority of
street, storm drainage, water, and wastewater projects do include funding to provide an initial cost for landscaping, but do not include
mowing or utility funding. Again, during the budget process, increased funding is determined by how a department is managing
current funds, and usually after a full year or two that a project has been online, the department can receive additional funding.

Property Tax Rate Implications

The property tax is comprised of two portions, debt service and maintenance and operations. The debt service portion of the tax rate
is used to retire the bonds issued to build the various projects throughout the city that require major capital outlay. The maintenance
and operation portion of the tax rate is used to fund the City’s operational services. These operating services include public safety,
development, administration, and leisure services. The 2026 Proposed Capital Projects Budget and five-year Capital Improvement
Plan allow for growth in the maintenance and operation portion of the tax rate, while still completing the voter-approved capital
projects.

Capital Project Budget Policies

The City’s Capital Projects Budget considers the City’s needs, financing capabilities, tax rate limitations and operating budget
impacts, and the adopted projects’ economic development impacts. The following capital budget policies are included in the
City Council approved Financial Management Policies (Jan. 2023) and/or Debt Management Policies (March 2019). The notation in
parentheses indicates where the policy can be found in the Financial Management Policies.
1. Long-term debt issued for capital projects will not exceed the projects useful life (Chapter V. Section E.).
2. The City will endeavor to maintain 1.50 coverage for all indebtedness of the Water and Wastewater Fund. (Debt Management
Policies).
3. The project acknowledges operating and maintenance costs. (Chapter V. Section C.).
4. The ratio between the interest and sinking (Debt Service) and operations and maintenance (General Fund) tax rate will be no
greater than 40/60. (Debt Management Policies).

General Obligation Debt Limitation

No general obligation debt limitation is imposed on the City under current State law or the City’s Home Rule Charter.

185