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Office of the Independent Budget Analyst Capital Improvement Program: The Citizens Guide And Improvement Efforts Presentation to the Chamber of Commerce Infrastructure, Land Use, and Housing Committee October 16, 2012 Introduction

SLIDE 1

Capital Improvement Program:

The Citizen’s Guide And Improvement Efforts

Presentation to the

Chamber of Commerce Infrastructure, Land Use, and Housing Committee

October 16, 2012 Office of the Independent Budget Analyst

SLIDE 2

Office of the IBA

Introduction

Citizen’s Guide to the Capital

Improvements Program (CIP)

Recent and Ongoing Efforts to Improve

the CIP

Next Steps: Developing a Multi-year

Capital Improvements Plan

SLIDE 3

Office of the IBA

Citizen’s Guide – Overview

Our office developed the Citizen’s Guide to the Capital

Improvement Program to provide a solid foundation of knowledge on the CIP.

This Guide can be used in conjunction with our

Citizen’s Guide to the City’s Operating Budget which provides an outline of how the monies coming into the City will be spent to operate and maintain City functions and services.

The Guide to the CIP includes both a full version and a

Quick Look or summary version and can be found on

ur website: http://www.sandiego.gov/iba/.

SLIDE 4

Office of the IBA

Citizen’s Guide – 4 Keys to Understanding the CIP

1.

The City’s CIP is a complex process and generally includes:

Id Ident ntifying ng Need eeded ed C CIP Proje ject cts Id Ident ntifying ng Fund unding ng and nd Prioritiz izin ing Proje ject cts Bud udge geting g fo for t the he C CIP (FY 201 2014) Implementa tati tion

f Projects i in the he A Approved CIP CIP B Bud udge get

Along with the Mayor and City Council, many City departments and organizations are

SLIDE 5

Office of the IBA

Citizen’s Guide – 4 Keys to Understanding the CIP

2. Many City Department and organizations are responsible for various aspects of the CIP process, including:

– Asset-owning departments – Financial Management – CIP Review and Advisory Committee (CIPRAC) – Public Works-Engineering & Capital Projects (E&CP)

The overall CIP process is decentralized and the City does not

have one leader or department that provides coordination and

versight.

SLIDE 6

Office of the IBA

Citizen’s Guide – 4 Keys to Understanding the CIP

3. The CIP has significant funding constraints:

– The General Fund is not a primary source of funding,

because it is used to fund the City’s core community services.

– Infrastructure needs exceed available resources so the

City has competing priorities for limited resources.

– The CIP is funded from various sources that often have

specific restrictions on how they can be used.

As a result, there is relatively little discretionary funding and

some departments have more available funding than others.

SLIDE 7

Office of the IBA

Citizen’s Guide – 4 Keys to Understanding the CIP

4. The annual CIP budget process is the City’s mechanism for getting projects approved and implemented.

– The majority of the CIP budget has funded ongoing

projects and only a only a small portion has been available to begin new projects.

– Given funding constraints and competing priorities, the

City has a significant backlog of deferred capital projects.

The CIP budget includes ongoing projects and new projects

started in the current fiscal year, but does not include new projects starting in later fiscal years or all unfunded needs.

SLIDE 8

Office of the IBA

Recent Improvement Efforts

Development and Approval of Five-Year Deferred

Capital Funding Plan – Two bonds worth about $175 million have been issued so far to fund deferred capital projects.

Restructured Contracting Function for

Construction and Consultants to Public Works Department – The time for contract bid and award has been reduced from 6-8 months to 2-3 months.

CIP Streamlining and Transparency Improvements

– Are anticipated to trim an additional 3 to 12 months

ff of the life cycle of each project.

SLIDE 9

Office of the IBA

Ongoing Improvement Efforts

Revision of Council Policy for Prioritizing CIP

Projects (800-14) – Based on lessons learned from the application of the ranking factors and recommendations from the Office of the City Auditor reports on the CIP, City staff are planning to propose revisions to these ranking factors in the next few months.

Public Outreach to Obtain Input for the FY 2014

CIP Budget through the Community Planners Committee (CPC) – E&CP is leading this effort with began in August 2012 and is currently under way.

SLIDE 10

Office of the IBA

Challenges Highlight the Value of a Multi-Year Capital Plan

Staff can more effectively:

Plan to address community needs over five-years rather

than in an annual budget.

Plan for projects that will implement the visions,

policies, and guidelines set forth in the General and community plans.

Link existing multi-year plans to decrease duplication

and identify Citywide deficiencies or gaps.

Look for financing opportunities in advance to identify

needed funding for projects, such as applying for grants.

SLIDE 11

Office of the IBA

Next Steps: Multi-Year CIP Plan

Steps to developing a Multi-year Capital Plan:

Pulling together existing multi-year plans, such as Deferred Capital and TransNet Plans.

Identifying Citywide infrastructure needs and priorities

– Optimally, priorities should be driven by desired

service levels and asset conditions—this is known as Asset Management.

– Some departments have established desired service

levels, assessed the condition of their assets, and developed plans that prioritize projects, but many departments lack resources for this purpose.

SLIDE 12

Office of the IBA

Next Steps: Multi-Year CIP Plan

Estimating the investment required to meet those priorities;

Projecting revenue from existing funding sources;

Identifying other funding opportunities, like grants; and

Developing a financing strategy to address remaining unfunded priorities.

SLIDE 13

Office of the IBA

Conclusion

As San Diego continues to deal with budgetary and

resource constraints, competing priorities, and an increasing backlog of deferred capital projects, development of a Multi-year Capital Plan is an important next step for outlining an infrastructure improvement and financing strategy.

Public involvement and support in an infrastructure

improvement strategy is vital to its success—both in providing input on community needs and priorities and helping to identify and support future financing efforts so that Citywide and community goals can be achieved.

SLIDE 14

Capital Improvement Program:

The Citizen’s Guide And Improvement Efforts

Presentation to the

Chamber of Commerce Infrastructure, Land Use, and Housing Committee

October 16, 2012 Office of the Independent Budget Analyst

Office of the IBA

Introduction

Improvements Program (CIP)

the CIP

Capital Improvements Plan

Office of the IBA

Citizen’s Guide – Overview

Improvement Program to provide a solid foundation of knowledge on the CIP.

Citizen’s Guide to the City’s Operating Budget which provides an outline of how the monies coming into the City will be spent to operate and maintain City functions and services.

Quick Look or summary version and can be found on

Office of the IBA

Citizen’s Guide – 4 Keys to Understanding the CIP

1.

The City’s CIP is a complex process and generally includes:

Office of the IBA

Citizen’s Guide – 4 Keys to Understanding the CIP

2.

Many City Department and organizations are responsible for various aspects of the CIP process, including:

have one leader or department that provides coordination and

Office of the IBA

Citizen’s Guide – 4 Keys to Understanding the CIP

3.

The CIP has significant funding constraints:

because it is used to fund the City’s core community services.

City has competing priorities for limited resources.

specific restrictions on how they can be used.

some departments have more available funding than others.

Office of the IBA

Citizen’s Guide – 4 Keys to Understanding the CIP

4.

The annual CIP budget process is the City’s mechanism for getting projects approved and implemented.

projects and only a only a small portion has been available to begin new projects.

City has a significant backlog of deferred capital projects.

started in the current fiscal year, but does not include new projects starting in later fiscal years or all unfunded needs.

Office of the IBA

Recent Improvement Efforts

Capital Funding Plan – Two bonds worth about $175 million have been issued so far to fund deferred capital projects.

Construction and Consultants to Public Works Department – The time for contract bid and award has been reduced from 6-8 months to 2-3 months.

– Are anticipated to trim an additional 3 to 12 months

Office of the IBA

Ongoing Improvement Efforts

Projects (800-14) – Based on lessons learned from the application of the ranking factors and recommendations from the Office of the City Auditor reports on the CIP, City staff are planning to propose revisions to these ranking factors in the next few months.

CIP Budget through the Community Planners Committee (CPC) – E&CP is leading this effort with began in August 2012 and is currently under way.

Office of the IBA

Challenges Highlight the Value of a Multi-Year Capital Plan

Staff can more effectively:

than in an annual budget.

policies, and guidelines set forth in the General and community plans.

and identify Citywide deficiencies or gaps.

needed funding for projects, such as applying for grants.

Office of the IBA

Next Steps: Multi-Year CIP Plan

Steps to developing a Multi-year Capital Plan:

Pulling together existing multi-year plans, such as Deferred Capital and TransNet Plans.

Identifying Citywide infrastructure needs and priorities

service levels and asset conditions—this is known as Asset Management.

levels, assessed the condition of their assets, and developed plans that prioritize projects, but many departments lack resources for this purpose.

Office of the IBA

Next Steps: Multi-Year CIP Plan

Estimating the investment required to meet those priorities;

Projecting revenue from existing funding sources;

Identifying other funding opportunities, like grants; and

Developing a financing strategy to address remaining unfunded priorities.

Office of the IBA

Conclusion

resource constraints, competing priorities, and an increasing backlog of deferred capital projects, development of a Multi-year Capital Plan is an important next step for outlining an infrastructure improvement and financing strategy.

improvement strategy is vital to its success—both in providing input on community needs and priorities and helping to identify and support future financing efforts so that Citywide and community goals can be achieved.

QUESTIONS ?

Chamber of Commerce October 16, 2012