PAYG and Short-term Finance FY 2019 PROPOSED BUDGET HIGHLIGHTS Fund 313 County Board Work Session April 5, 2018
PAYG Overview • Pay-As-You-Go (PAYG) is funded from local County tax dollars • Historically used for routine maintenance capital expenditures • Reduces premature asset failure and extends useful life • Maintains existing infrastructure versus new projects • Asset condition assessment software being updated for Parks and Facilities programs • Maintenance capital funded from two primary sources • PAYG • Voter approved GO bonds • PAYG funds assets with useful life of ten years or less 1
PAYG Overview • Upcoming Capital Improvement Plan formulation will include larger conversation about annual PAYG funding needs • Discussion about long-term effects of reducing PAYG and being able catch up with deferred maintenance • Choices about new projects and associated operating costs versus maintaining existing inventory with appropriate funding levels • On-going PAYG funds have reduced slightly over the past several years 2
PAYG Overview • Availability of “one-time” funds (non-recurring) have substantially been reduced over the last two years • Carryover funds previously available during closeout and budget formulation have diminished 3
PAYG Overview PAYG Balances Beginning PAYG balance (7/1/17) : $132M FY18 Commitments to-date (2/28/18) : $58M Available Balance (2/28/18) : $81M • Carryover balances fluctuate year-to-year depending on project execution • Capital projects are multi-year in nature • Large project carryover balances include: (all balances are committed to existing projects) • Central Library interior improvements – balance $0.965M • Anticipated completion Fall 2018 • Fire Station 6 – balance $0.515M • Anticipated completion Winter 2018 • Fire Station 8 – balance $1.7M • Anticipated completion Fall 2021 4
PAYG Overview PAYG Balances • Carryover balances cont’d: • Mosaic Park – balance $4.27M • Anticipated completion Spring 2020 • Long Bridge – PAYG & developer contribution balance $21.75M (additional GO Bonds balance of $15.6M) • Anticipated completion 2020 • Improvements Outside Major Corridors –balance $0.465M • Anticipated completion FY 2021 • Rosslyn Ballston Arterial Street Improvements – balance $1.01M • Anticipated completion FY 2020 • Streetlighting – balance $1.67M • Anticipated completion FY 2020 • Transportation Systems and Signals – balance $1.84M • Anticipated completion FY 2019 5
Summary of Proposed Budget • Aging inventory continuing to grow • Adding staff where appropriate to help plan and execute capital projects • Proposed FY 2019 reduction of ongoing PAYG budget of $1.5M • Other fund sources used to fund FY 2019 Capital Program • Parks Program - $3.802M • Synthetic Turf Fields • Partnerships/Cost-sharing - $0.496M (Long Bridge Field #1; Marymount cost- share) • Crystal City TIF - $1.335M (Long Bridge Fields #1 & #2) • Parks synthetic turf contingency balances - $0.810M (New field, location TBD) • Parks Field Fund (team fee revenue) - $1.06M (New field, location TBD) • Grass Fields • Program contingency balances - $0.10M (Gunston Park grass field replacement)
Summary of Proposed Budget • Other fund sources, cont’d • Transportation Program - $0.40M • Paving - $0.209M (Prior-year GO Bond balances) • Multi-modal Projects - $0.191M (Prior-year GO Bond balances) • Facilities Program - $0.10M • Trades Center Master Plan - $0.10M (Prior-year GO Bond balances) • Proposed budget does not include GO bond funding that will be determined during the upcoming FY 2019 – FY 2028 CIP formulation
Capital Program Accomplishments PAYG Overview Major Completed Capital Projects • Bluemont Park Athletic Field and Trail Improvements • High View Park Athletic Field, Restroom/Storage, Picnic Shelter and Plaza • Barcroft Sports & Fitness Center Gymnastics Program Expansion • Aurora Hills Community and Senior Center and Library Upgrades • County completed four key land acquisitions 8
Capital Program Accomplishments PAYG Overview Major Completed Capital Projects, cont’d • Building 2020 Garage and Elevator Upgrades • Trades Center Parking Garage Third Level • HVAC Upgrades at the Water Pollution Control Plant • Nearly $20 million in contracts awarded for transportation improvement projects • The County completed ten neighborhood conservation projects 9
Proposed Capital Program: Reduction to PAYG Program Service Impacts Budget Impact FY 2018: $6,875,285 Paving Program FY 2019: $5,321,750 • Stated Paving Condition Index (PCI) goal of 75-80 Change: -$1,553,535 • Current PCI is 74 • Maintains PCI contingent upon various factors • Severity of weather • Contracting costs • Price of oil • Affords approximately 78.5 lane miles of paving • Does not include 2018 GO bond funds of ~$11M anticipated 10
Paving Cost History Proposed Capital Program: 2017 Final Paving/Slurry Seal/Micro-surfacing Map link: https://arlingtonva.s3.dualstack.us-east-1.amazonaws.com/wp-content/uploads/sites/19/2017/02/2017FinalPavingSlurryMicroSeal.pdf 11
Summary of Proposed Budget Short-term finance (master lease) • Average funding of $10M per year • Previously financed through use of master lease program • Master lease infrequently used in other jurisdictions and not many banks are currently providing the service • County intends to utilize either a line of credit combined with short term bank loans / revenue bonds or a variation of previous master lease vehicles
Summary of Proposed Budget Short-term Finance • Funding levels fluctuate depending on equipment replacement cycles • Fund source typically finances: • PC replacement • Network Equipment • Server Refreshment • Video Conferencing • Enterprise Wireless • Fire Station Alerting System • Fire Breathing Apparatus • Fire Defibrillators • Public Safety Mobile and Portable Radios • Sheriff and Police In-Car Cameras • Fire Vehicles 13
Proposed Capital Program: PAYG and Short-term Finance Projects ($ in 000s) PROGRAM CATEGORY Base One- FY 2019 FY 2017 Total FY 2019 Proposed Funds Time Proposed C/O PAYG Funds FY 2019 Funds Funds Short- Term Fin T ransportation Maintenance C apital $1,888 $223 $2,111 $140 $2,251 - F acilities Maintenance C apital - - - $1,562 1,562 - P arks Maintenance C apital 1,022 - 1,022 $100 1,122 - S ubtotal Maintenance C apital 2,910 223 3,133 1,802 4,935 - R egional P artnerships 1,263 - 1,263 - 1,263 - Neighborhood C onservation - - - 500 500 - E nterprise Information T echnology 400 - 400 1,282 1,682 3,985 P ublic S afety Information T echnology - - - - - 5,123 T ransportation Multi-Modal 251 - 251 119 370 - P ark Master P lans - - - - - - **S ynthetic T urf 179 - 179 1,871 2,050 - F acilities Design and C onstruction - - - 855 855 - Land Acquisition - - - - - - C apital C ontingent 319 - 319 - 319 - S ubtotal Other C apital 2,412 - 2,412 4,627 7,039 9,108 Total Projects $5,322 $223 $5,545 $6,429 $11,974 9,108 * Numbers may not add due to rounding. **S ynthetic turf carryover funds do not include C rystal C ity T IF funds or P artnership cost-sharing funds 14
Proposed Capital Program: Transport ortati tion on • Paving program completed Fall 2019. The other programs/ projects are ongoing. Transportation Maintenance Capital The inventory of streets is broken down as follows: 25 percent are arterial streets, 11 percent are collector streets and 64 percent are residential streets. The Pavem ent Condition I ndex (PCI ) is Paving updated annually and Arlington’s average PCI is currently 74. The County uses a variety of m aintenance strategies to m aintain streets as detailed below. Program Description GO Bond 2018 GO Bond PAYG Balances Referenda Paving has been increased to over 75 lane m iles annually. This includes about three lane m iles of Hot Mix Overlay streets without curb and gutter (five percent of $476,000 funding). $209,000 $9,900,000 Slurry Seal extends the life of pavem ent on Residential Streets at a m uch lower per square yard Slurry Seal cost. Program is based on approxim ately 40 lane $400,000 m iles being slurry sealed annually. Microsurfacing extends the life of pavem ent for Arterial Streets at a lower per square yard cost. Microsurfacing Program is based on approxim ately 10 lane m iles $500,000 being m icrosurfaced annually. Re-builds include partial and total excavations of blocks to re-build the base and sub-base of Re-Building of roadways where significant roadway failure has Streets occurred. Since 2008, an innovative process to stabilize soil with cem ent has reduced re-build costs by around 50 percent. $750,000 Subtotal Paving Program Only Funding includes PAYG ( $1.38M) and * GO Bonds ( $10.85M) $1,376,000 $209,000 $10,650,000 Other Transportation I ncludes I TS Device Replacem ent, Street Lighting, Maintenance and Trail Lighting. $875,000 Capital I ncludes bicycle and pedestrian projects, parking Multi-Modal m eters, parking technology and the transportation $370,000 $191,000 asset m anagem ent program . GO Bonds are assum ed from the upcom ing 2018 GO Bond Referenda 15 $2,621,000 $400,000 $10,650,000 Total ( PAYG $2.6M; Bonds $11.05M)
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