PAYG and Short-term Finance - FY 2019 PROPOSED BUDGET HIGHLIGHTS Fund 313

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PAYG and Short-term Finance - FY 2019 PROPOSED BUDGET HIGHLIGHTS Fund 313
PAYG and Short-term Finance
 FY 2019 PROPOSED BUDGET HIGHLIGHTS
                Fund 313
          County Board Work Session
                 April 5, 2018
PAYG and Short-term Finance - FY 2019 PROPOSED BUDGET HIGHLIGHTS Fund 313
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

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PAYG and Short-term Finance - FY 2019 PROPOSED BUDGET HIGHLIGHTS Fund 313
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
PAYG Overview
     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
  PAYG Overview
       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
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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
Paving Program                                        FY 2018:        $6,875,285

• Stated Paving Condition Index (PCI) goal of 75-80   FY 2019:        $5,321,750
                                                      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 Capital
Proposed Cost History
                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
                         Short-termBudget
                                    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
Short-term
Summary       Finance
        of Proposed Budget
          • 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

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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 rans portation 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 artners hips                        1,263             -           1,263        -         1,263       -
   Neighborhood C ons ervation                        -              -              -        500          500       -
   E nterpris e Information T echnology               400            -             400     1,282        1,682     3,985
   P ublic S afety Information T echnology            -              -              -         -            -      5,123
   T rans portation Multi-Modal                       251            -             251       119          370       -
   P ark Mas ter P lans                               -              -              -         -            -        -
   **S ynthetic T urf                                 179            -             179     1,871        2,050       -
   F acilities D es ign and C ons truction            -              -              -        855          855       -
   L and Acquis ition                                 -              -              -         -            -        -
   C apital C ontingent                               319            -             319        -           319       -
       S ubtotal O ther 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 rys tal C ity T IF funds or P artners hip cos t-s haring funds
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Proposed Capital Program: Transportation
• 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 Pavement Condition Index (PCI) is
             Paving
                                 updated annually and Arlington’s average PCI is currently 74. The County uses a variety of
                                 maintenance strategies to maintain streets as detailed below.
             Program             Description                                              PAYG          GO Bond       2018 GO Bond
                                                                                                        Balances      Referenda
                                Paving has been increased to over 75 lane miles
                                annually. This includes about three lane miles of
             Hot Mix Overlay
                                streets without curb and gutter (five percent of
                                funding).                                                  $476,000        $209,000         $9,900,000
                                Slurry Seal extends the life of pavement on
                                Residential Streets at a much lower per square yard
             Slurry Seal
                                cost. Program is based on approximately 40 lane
                                miles being slurry sealed annually.                        $400,000
                                Microsurfacing extends the life of pavement for
                                Arterial Streets at a lower per square yard cost.
             Microsurfacing
                                Program is based on approximately 10 lane miles
                                being microsurfaced annually.                              $500,000
                                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 cement 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     Includes ITS Device Replacement, Street Lighting,
             Maintenance        and Trail Lighting.
             Capital                                                                       $875,000
                                Includes bicycle and pedestrian projects, parking
             Multi-Modal        meters, parking technology and the transportation
                                asset management program.                                  $370,000        $191,000
             GO Bonds are assumed from the upcoming 2018 GO Bond Referenda
                                                                                       $2,621,000       $400,000       $10,650,000       15
                                             Total (PAYG $2.6M; Bonds $11.05M)
Proposed Capital Program: Parks and Recreation
                                            Parks Maintenance Capital Program

                                                      FY 2019 Project List
                                                                                                         Anticpated
                                                                             Program
      Project Name - Description                                   PAYG                     Total     Start/Completion
                                                                           Contingency
                                                                                                          Schedule
      1. Gunston Park – Design and construction. The                                                  S ummer 2018 / F all
                                                               $405,000    $100,000      $505,000
      project is for replacement of the grass community field.                                        2018
      2. Westover Park – Design and construction. The                                                 S ummer 2018
                                                               $62,000                   $62,000
      project is for replacement of the grass community field.                                        /S ummer 2018
      3. Capital Asset Manager – Staff resources to manage
                                                               $155,000                  $155,000     NA
      the capital asset program.
      4. Field Fund Program – The fees assessed for
      rectangular fields are to support replacement and
      construction of synthetic turf fields in the County (annual
      estimate of $180,000). The fees assessed on diamond $250,000                       $250,000
      fields (annual estimate of $70,000) are to be used for
      specific diamond field enhancements, such as improved
      irrigation, batting cages, or accelerated sod replacement.                                      NA
      5. Feasibility Studies – These funds will provide the
      ability to conduct timely and relevant analysis and
      studies as opportunities arise. The program is meant for
      new planning initiatives that are outside current CIP
                                                                $150,000                 $150,000
      projects. Examples are potential planning and analysis
      needs for parks and sites associated with site plan
      proposals, Arlington Public Schools proposals, affordable
      housing proposals, or land acquisition opportunities.                                           As Needed
                                                       Totals $1,022,000   $100,000      $1,122,000
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Proposed Capital Program: Parks and Recreation
                                                                Parks Synthetic Turf Program
                                                                 FY 2019 PAYG Project List
                                                            Synthetic Turf                                                              Anticipated
   Project Name - Description             PAYG                 Program       Cost Share     Field Fund     CC TIF       Total        Start/Completion
                                                             Contingency                                                                 Schedule
1. Long Bridge – Design and
                                                                                                                                        Summer 2018 /
construction of synthetic turf, infill and                                                                   $838,392     $838,392
                                                                                                                                         Summer 2018
subbase repair for field #4.
2. Long Bridge – Design and
construction of synthetic turf, infill,
                                                                                                                                        Summer 2018 /
subbase repair and shade structures for                                          $496,379                    $496,379     $992,758
                                                                                                                                         Summer 2019
field #1. There is a 50/50 cost share
with Marymount University for this field.
3. New Field – Design and construction
for new synthetic turf location, to be
determined through the Public Spaces
Master Plan update process. Project                                                                                                     Fall 2019 / Fall
                                           $179,000               $810,000                    $1,061,000                $2,050,000
includes new subbase, synthetic turf,                                                                                                             2019
infill, site amenities (depends on site)
and potentially lighting (depends on
site).
                                 Totals          $179,000         $810,000       $496,379     $1,061,000   $1,334,771   $3,881,150

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Proposed Capital Program: Facilities
                                        Facilities Capital Program
                                          FY 2019 Project List
                                                                                      Anticipated
         Project Name - Description                                       Total    Start/Completion
                                                                                       Schedule
          1. Justice Center Facade Cleaning - Power wash the                          Summer 2018 /
                                                                          $247,000
          Detention and Court Police Facade.                                            Summer 2018
          2. Aurora Hills Library and Community Center - total
          roof replacement; HVAC replacement; installation of                           Summer 2018 /
                                                                          $705,000
          building automation system (BAS) and lighting                                  Summer 2019
          replacement.
          3. Software/System Upgrades - Replace Fire Alarm
                                                                                        Summer 2018 /
          systems at the Residential Program Center and Arlington         $100,000
                                                                                          Winter 2018
          Arts Center and upgrade access control panels
          4. Critical Systems Infrastructure – Replace
                                                                                     Summer 2018 / Fall
          uninterruptable power systems (UPSs) in County network          $300,000
                                                                                                 2018
          operating center (NOC)
          5. Chair Replacement - Systematic annual chair
          replacement program to replace task chairs throughout
          County facilities. Existing chairs ten years or older will be                 Summer 2018 /
                                                                          $110,000
          replaced, supportive of the industry standard for life                          Winter 2018
          span. This year would start the third year out of an
          eleven-year program.
          6. Interior Maintenance Capital Improvement -
          Systematic capital maintenance program that allows for
          the annual interior refurbishment of flooring, wallpaper,
          painting and signage. Facility revitalization has been
                                                                                        Summer 2018 /
          deferred over the past decade due to the lack of                $100,000
                                                                                          Spring 2019
          departmental funding sources. This program would
          enable the facilities to be upgraded through a systematic
          ranking of needs based on yearly assessments of our
          90+ buildings by internal staff.

                                                         Total PAYG $1,562,000
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Proposed Capital Program: Facilities
                           Facilities Design and Construction Program

                                      FY 2019 PAYG Project List
                                                                                               Anticipated
                                                                   GO Bond
 Project Name - Description                              PAYG                   Total       Start/Completion
                                                                   Balances
                                                                                                Schedule
     1.   ADA Remediation - In FY13, the County
     completed a comprehensive assessment of 54
     facilities to determine any deficiencies in access for    $500,000          $500,000            Ongoing
     persons with physical disabilities in it. This
     program is to remediate existing facilities.
     2.   Facility Master Planning and Feasibility
     Studies - Facility master planning provides an
     integrated approach that addresses short,
     intermediate, and long-term needs for County
     facilities. This funding is for staff charges for the
                                                               $355,000 $100,000 $455,000            Ongoing
     developer funded project at Fire Station#10
     ($60,000), site development at 26th and Old
     Dominion ($45,000), Feasibility Studies
     ($250,000), and partial funding for the Trades
     Center Optimization Study ($100,000).
                                                       Totals $855,000 $100,000 $955,000

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Proposed Capital Program: Information Technology
                                          Information Technology Maintenance Capital
                                                   FY 2019 PAYG Project List
      Program                                                                                                                Anticipated
                                                                                                               PAYG
                          Description                                                                                     Start/Completion
                                                                                                                              Schedule
                          This project provides continuous refreshment of County network equipment
                                                                                                                              Ongoing, funds
      Network Equipment as it reaches end of life and/or requires enterprise-level feature
                                                                                                             $491,000     expended by end of
      Refresh             enhancements and upgrades. This funding is in addition to short-term
                                                                                                                                    FY 2019
                          financing funds.
                          The refreshment of this hardware is necessary to support connections for
                          remote workers to connect to County applications and network drives and                            Summer 2018 /
      TeleworkingMobility                                                                                    $261,134
                          enables teleworking. The support for existing equipment expires in the                               Winter 2018
                          second quarter of FY 2019.
                          With these FY 2019 funds, information security will be expanded by
                          implementing a more robust mail filtering system that will catch more spam                         Summer 2018 /
      Security                                                                                       $265,000
                          and malware and reduce the chances of a ransomware attack. An estimated                              Winter 2018
                          80% of the threats received from email would be captured by this tool.
                          The new system will manage all business functions needed in the
      DHS Housing         administration of HCV programs including: client waiting list, eligibility
                                                                                                                                Winter 2018
      Choice Voucher      determination, subsidy calculation, payments, financial reconciliation with        $100,000
                                                                                                                                 completion
      Payment System      County financial system, and be compliant with all HUD regulations and
                          mandates.
                          This new system will manage all business functions needed in the
                          administration of Local Housing and Assistance Programs including: client's
      DHS Local Housing
                          eligibility determination, benefit calculation, payments, financial                                   Winter 2018
      and Benefits                                                                                           $315,000
                          reconciliation with County financial system, and reporting. Previously, these                          completion
      Software System
                          local programs were handled within the Housing Choice Voucher (HCV)
                          system through a special configuration.
                          Effective in FY 2015, the County began assessment of a $5.00 fee as part of
                          the costs in each criminal or traffic case in the district or circuit courts for
                          the use of purchasing an electronic summons system. The costs of the
      Electronic
                          system include peripheral equipment such as handheld devices, portable             $150,000       Ongoing revenue
      Summons System
                          printers, driver’s license scanners, and barcode readers, as well as the
                          maintenance required for the system. The FY 2019 PAYG budget reflects the
                          projected annual revenue from the fees.
                          This new financial reporting software will be used to automate the
                          preparation of the County’s CAFR schedules and reports, thereby reducing
                                                                                                                              Spring 2019 /
      CAFR Software       personnel time spent and compounding resource utilization. Improved                $100,000
                                                                                                                              Summer 2019
                          oversight of County-wide financial reporting and financial transactions will
                          facilitate strong internal controls and reduce audit risks.
                          Total Information Technology FY 2019 PAYG                                          $1,682,134                        20
Proposed Capital Program: Short-term Finance
                                                  Information Technology
                                           FY 2019 Short-term Finance Project List
                                                                                                              Anticipated
         Project Name and Description                                                 Short-Term Financing Start/Completion
                                                                                                               Schedule
         Endpoint Replacement - Most end user computing devices in the
         County currently operate on Windows 7. In January 2020, manufactuer
                                                                                                                   Ongoing
         support for this operating system will terminate, and any devices still
                                                                                                             refreshment, funds
         running it will stop receiving critical security patches. Thus, all County                $1,985
                                                                                                             depleted by end of
         devices must be upgraded to Windows 10 before this date. These
                                                                                                                    FY19
         funds will be used to replace over 960 devices and upgrade over 1,200
         devices.
                                                                                                                Ongoing
         Network Equipment Refresh - These funds will be used to replace
                                                                                                          refreshment, funds
         network switches and routers which are still being used past their                         1,500
                                                                                                          depleted by end of
         useful life.
                                                                                                                 FY19
                                                                                                                Ongoing
         Data Storage - These funds will be used to replace servers and other                             refreshment, funds
                                                                                                      500
         storage hardware that have reached the end of their useful life.                                 depleted by end of
                                                                                                                 FY19
            Subtotal Enterprise Technology and Equipment                                          $3,985
         Fire Station Alerting System - These funds will be used to upgrade and
                                                                                                           Start Summer 2018
         standardize station alerting, replacing the County’s current twelve-year-
                                                                                                                  / Anticipated
         old technology. The alerting system reduces response time for                               1,110
                                                                                                            completion Spring
         firefighters and paramedics, reducing the chance of flashover and
                                                                                                                          2019
         increasing the chances of patient survival.
         Fire Breathing Apparatuses - These funds will be used to replace Self
         Contained Breathing Apparatuses (SCBA), which are devices that
         provide clean air to firefighters in hazardous conditions. The County’s                             Start Summer 2018
                                                                                                     3,298
         current SCBAs were purchased in September 2008 and will no longer                                         / Winter 2019
         be covered under the manufacturer’s ten-year warranty as of
         September 2018.
         ECC Radio System - Circuit to IP Simulcast Conversion - The existing
         emergency communication radio system network operates using circuit-
         based connectivity between remote sites within the system. Building                                        Anticipated
         more advanced features into this radio system will require first                             715     completion Spring
         converting it to Internet Protocol (IP) based connectivity. These funds                                          2019
         will convert all remote sites to the IP based connectivity and replace all
         relevant hardware and fiber.
            Subtotal Public Safety                                                                $5,123
         General Fund: Program Costs                                                              $9,108
         TOTAL Project Costs                                                                      $9,108
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