Long-Range CIP Planning is part of a larger Capital Improvement Program planning program. The City of Austin regularly undertakes projects to improve public facilities and infrastructure assets for the benefit of its citizens. Projects include the construction of city facilities such as recreation centers and libraries as well as the reconstruction of streets, replacement of water/wastewater lines and provision of power for City of Austin residents. Collectively, these projects are referred to as the City of Austin Capital Improvements Program (CIP). These improvements are an investment in the future of the organization and Austin. As such, emphasis is placed on anticipating capital needs well in advance and fully-integrating them with service and financial projections. Projects are department identified/prioritized to improve asset conditions and they support Imagine Austin and various Council-approved master plans, strategic plans, and initiatives. Each department’s prioritization process is different based on its specific service responsibilities.

 

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• Capital Needs Identification and Planning: concepts identified through policy and planning documents and renewal/reinvestment needs. This is done on an ongoing basis.

• Long-Range CIP Planning: coordinates capital needs identification and asset conditions across City departments. This is completed every 2 years.

• 5-year CIP Plan and Capital Budget: starting for the FY2021 budget, the 5-year CIP plan and the capital budget are printed in the same document. These are annual documents.

• Program/Project Delivery: once authorization to expend funds is in place, delivery moves forward utilizing the funds to get the asset into service. Programs and projects are delivered year round.

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CIP Funding

Once needs are identified, departments seek appropriate and available funding sources. Ultimately a project cannot move forward until the project is funded it or finds public or private sector partners to help fund or implement the project. Therefore, to ensure the project can be completed successfully, the prioritization of capital projects often occurs in the context of feasibility, available funding, and partnership opportunities.

 

The CIP is supported by a number of different funding sources, including debt, operating transfers, grants, and various other revenues such as donations, fees in lieu, donations, developer contributions, etc. The type of funding utilized for a project can vary according to the type of project; certain funding can only legally be used on certain types of projects. Debt sources include public improvement bonds, or voter-approved General Obligation bond programs, certificates of obligation, contractual obligations, and commercial paper. The use of debt is suitable in capital projects because it promotes intergenerational equity in bearing the costs of the projects in conjunction with enjoying the benefits.

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Available funding depends on what sources of revenue are available to the department. Enterprise departments, such as Austin Energy, Austin Water, and Aviation, are revenue generating and use this revenue and revenue bonds to fund capital improvement projects. Watershed Protection, Public Works and Austin Transportation use revenue collected through user fees as well as general obligation debt. General government departments, such as Parks and Recreation, the public safety departments, and Austin Public Libraries, Austin Public Health, typically fund capital projects and programs through voter-approved public improvement bonds or other types of debt that are repaid through property tax revenues.

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The City also relies on partnerships with private entities known as public-private partnerships (P3s). P3s involve a contractual relationship between a public sector agency and a private party in which the private party provides a public service or project, and both parties assume financial, technical and operational risk in the project. P3s allow the skillsets and assets of both the private and public sectors to be shared for the delivery of the public service or facility. For more information on the City’s public private partnership program visit the P3 Program Office Public-Private Partnerships (P3) Program Office | AustinTexas.gov

 

The financial policies adopted by Council ensure that the City's financial resources are managed in a prudent manner. These policies are reviewed annually for compliance, and changes and additions to the policies are submitted for Council consideration. Several of the policies have a direct relation to the financing of capital projects.

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5 Year CIP Plan and Capital Budget

With funding identified, projects are presented in the Five-Year CIP plan. Each year, the City of Austin produces a Five-Year CIP Plan that outlines the various capital projects and spending plans that will take place over the next five fiscal years. The CIP Plan is not intended to be an all-inclusive inventory of the City’s capital needs for the upcoming five years. Instead, it outlines the planned projects with available funding sources and serves as the basis for new appropriations included in the annual Capital Budget and available on Austin Finance Online.

 

Unlike the Operating Budget, which appropriates funding annually, Capital Budget funds are available until expended, which typically occurs over multiple years. The annual Capital Budget provides the additional appropriations necessary to begin new or to continue existing projects. The Capital Budget presents financial data by strategic outcome, infrastructure category, and funding source. The Capital Budget funds major improvements and expansions of City facilities and infrastructure, while the Operating Budget primarily funds the ongoing operations of each department, including personnel and programmatic costs. City Council approval of the Capital Budget authorizes departments to expend budget for capital projects. With this authorization, projects move to implementation and are multi-year in nature.