Disclaimer: The comments in this blog are my personal opinion and may or may not reflect an adopted position of the city of Glendale and its city council.

City council has now spent several workshops on the Capital Improvement Program (CIP) with at least one more workshop scheduled on the same topic. Why all the emphasis on the CIP?

In all government whether federal, state or local, power derives from how taxpayer dollars are spent. Having the authority to decide where money is spent is a very powerful. On a federal level a successful Congressman/woman will bring home a project like a road or federal building to a district. It means jobs and an infusion of cash into a district. On a local level one of the imperatives is to provide amenities for district residents or to get the streets fixed in a district.

In this blog I will try to explain the CIP in detail. If you aren’t interested, stop here…but if you are, please read on.

The Capital Improvement Program (CIP) is a constant 10 year plan that specifies which projects will get built and where the funding will come from. It applies to any project that costs over $50,000 and has a life span of at least ten years.

Even though it is a ten year plan, the first 5 years are the years to which you should pay attention. The second five years are placeholders and over time, they may be eliminated or moved up into the first five years, as needs and priorities change.

Where does the money come from to fund the CIP? This is perhaps, the most complicated part of the process to understand. The major categories are:

  • General Obligation Bonds (G.O. Bonds). In the Glendale election of 2019 voters were asked to approve authorization to fund certain city areas running out of authorization such as Parks and Recreation. The city only issues G.O. Bonds when there is an identified project to construct and more importantly, if the issuance of the bonds will not raise your property taxes. As an FYI, city council voted on and approved a policy of not raising your property taxes to fund G.O. Bonds. There are about 12 different categories of G.O. Bonds from Public Safety to Open Spaces/Trails to Local Drainage (streets that get flooded).
  • Pay-As-You-Go. Money for the construction of some projects comes directly from the city’s General Fund. The city’s General Fund’s monies come from various sources including city sales taxes and state-shared revenues.
  • Transportation Sales Tax. Part of the city’s sales tax is restricted and dedicated to be used only for transportation related projects such as Pavement Management.
  • Highway User Revenue Fund (HURF). The state reimburses each city a portion of what you pay in gasoline sales tax. These funds are also restricted and can be used only for transportation related projects including mass transit such as buses.
  • Development Impact Fees (DIF). These are fees paid by a developer when a new project is constructed. They are to be used in the general proximity of where the new development was constructed. Hence the need for geographical zones to ensure that the money is spent in the appropriate geographical area. Over the years the city has modified DIF geographical zones requiring checking the boundaries of the zone to see if the money can actually be spent in a certain geographical area. It must also meet stringent regulations established by the state legislature. Currently there are at least a dozen DIF funding sources dependent on the year the funds were collected and what the DIF boundaries were at the time of collection.
  • Grants. The city is always applying for grants from various governmental agencies. Many grants require the city to provide matching funds. From the feds we often get grants in Public Safety, for our airport and the annual Community Development Block Grants. Maricopa County may issue grants for flooding issues. The state may issue grants for transportation issues. This list is not all inclusive as grant opportunities come and go.
  • Enterprise Funds. This area includes water, sewer, landfill and trash collection. These areas are restricted and are dependent upon rate payers for these services. These areas tend to issue their own bonds for projects as long as restrictive guidelines are observed although there have been times when General Fund revenues have been used to help fund a major project.

So it isn’t just good enough to identify a major project in the CIP, the funding source must be identified confirming there is enough money in that fund and that it is the correct funding source for the project.

I am going to list a CIP project in some of the areas presented to city council. If you would like to see all of the projects here is the link: 01 Draft CIP 2021.02.02. I must warn you this file is approximately 300 pages but this is what city council uses to do its homework for budget workshops on just the CIP.

  • Under Airport is CIPAP21010, Southwest Apron Design/Construct. All projects begin with CIP. AP stands for airport. The number refers to when it was added to the CIP. There is a Description of the project. In this case it is, “Project design and construction of southwest apron, taxi lane and access road to accommodate capacity needs.” Then there is a Justification, “Design and construction of new public apron, taxi land, and infrastructure to accommodate expansion of aircraft storage to meet capacity needs. Project required under FAA and ADOT Grant Assurances and Airport Design Standards.” The estimated cost of the project is offered and in this case is, Design from Fund 2190 slated for Fiscal Year (FY) 2024 in the amount of $225,000 and Construction from Fund 2190 slated for FY 2025 for $1,800,000 for a Grand Total of $2,025,000. Fund 2190 as a funding source is an Airport Capital Grant. The city has or will apply to the FAA for a grant for this project and it may require some city matching funds but that will not be known until the grant is issued.
  • Under Arts is CIPAT20033, Municipal Arts Program. There is Carryover of $1,245,125. That means money collected from previous years has accumulated to this amount and is available. The Description is, “City Council Ordinance No. 1226 created a Municipal Art Fund which provides for the purchase of works of art for public places. This consists of commissioned, non-commissioned and the performing arts, all reviewed and recommended by the Glendale Arts Commission (via the Annual Arts Plan0. These funds are used to implement the Annual Arts Plan and maintain and restore the City’s art portfolio (when necessary).” The Justification is, “By City Council Ordinance. No. 1226, a Municipal Art Fund is created which provides for the purchase of works of art for public places.”
  • Under Drainage is CIPDR21034, Bethany Home Road SD (storm drain), 43rd to 51st Description is, “Design and construction of storm drain pipe, inlets, catch basins and other appurtenances in a ½ square mile area centered on Bethany Home Road between 43rd Ave. and 51st Ave. Design began in FY21.” The Justification is, “Project is identified in the Storm Water Master Plan adopted by the city 2011. Maricopa County Flood Control District has budgeted $4.5 million toward completion of the project.” In FY 2022 the sources of funding and expenditures are: Carryover from Fund 2160, Other Grants of $604,173; In FY 2022,Construction from Fund 2160, Other Grants and Fund 4110, Flood Control Construction totaling $2,750,000; and in FY 2023, Construction from Fund 2160, Other Grants and Fund 4110, Flood Control Construction totaling $5,150,00; There is also the cost of Internal Charges from Fund 4110, Flood Control Construction of $123,500 in FY 2022 and $195,700 in FY 2023; in FY 2022 the cost of land totals $500,000 with funding from Fund 2160 and Fund 4110; Public Art in FY 2022 totals $27,500 from Fund 4110. The total cost of the project is $9,402,373 and the money comes from grants with some matching funds from the city.
  • City Hall 2nd Floor HVAC UNIT, CIPFC21048. Description is, “Replacement of the main HVAC for the second floor at City Hall.” Justification is, “The HVAC unit for the second floor of City Hall has exceeded it’s expected life cycle and has begun to fail.” The funding source is Fund 1080, General Government, Pay As You Go, and is Carryover in the amount of $44,221 that will be expended in FY 2022.

I could go on but I think you get the idea about the information that is presented to city council during the CIP budget workshops. The other categories I did not cover are Landfill, Library, Parking Lots, Parks, Public Safety, Solid Waste, Streets, Transit, Water and Wastewater. You can see the full presentation of the CIP in the link I cited above.

Mind you, that is just one part of our budget review. The other portion will be a city council review of and approval of departmental expenditures and employee salaries and benefits. We will probably wrap up budget discussions and decisions in April having taken 4 months of workshop discussions to arrive at a balanced budget for Fiscal Year 2022.

© Joyce Clark, 2021       


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