Capital Improvement Program

2007-2011 CAPITAL IMPROVEMENT PROGRAM

The 2007-2011 Capital Improvement Program continues the progressive, strategic and comprehensive approach to capital investment that has been reaping dividends to the City of Fairfield for many years. That approach continues to stress use of a prudent fiscal policy and investment strategy. The projects slated for 2007 total approximately $15,482,037. The five (5) year Capital Improvement Program lists $85,059,367 in projects planned through calendar year 2011.

Funding for the Capital Improvement Program comes from a variety of sources including the General Fund, .2% Capital Improvement Fund, .2% Street Improvement Fund, Downtown Development, Flood Protection, Recreation Facilities Fund, Water and Sewer Utility Funds, State Issue II and other outside funding sources, among others. A detailed listing of these funds and the sources and uses of the monies contained therein is included in the CIP Cash Flow Statement section for City Council's review.

2007 PROJECTS

The projects contained in the 2007-2011 Capital Improvement Program include ongoing equipment replacement and major maintenance-type projects that are incurred by the City on an annual basis, as well as one-time expenditures of funds such as major roadway, utility, parks, public buildings and other infrastructure projects.

Major Projects – In 2007, some of the major projects and their respective costs include:

• Golf Course Club House at $2.2 million included in the 2006 CIP Budget financed by a note.
• Black Bottom Park development at $1.12 million with $905,000 from grants.
• Miami-Erie Canal Bikeway Project at $1.325 million with $1.075 million in grants.
• LeSaint Drive Reconstruction at $1.366 million with $630,000 in grants.
• Flood Prone Home Purchases at $1.821 million with $1.366 million in grants.
• Route 4 & Crescentville & Lane Improvements at $2.84 million with $1.69 million in outside funding.
• Renovation of the Municipal Building at $1.79 million City funded over 2 years.

Recurring Projects – For 2007, some of the major annual programmed maintenance projects, their department or division and their respective costs include:

• Street Paving & Curb Replacement Project (Street Division/Public Works) $900,000
• Concrete Replacement Project (Street Division/Public Works) $700,000
• Citywide Computer Hardware Replacement (IT Division/Finance) $175,000
• Citywide Computer Software Upgrades (IT Division/Finance) $ 30,000
• Citywide Computer Infrastructure Upgrades (IT Division/Finance) $ 30,000
• Pavement Markings (Street Division/Public Works) $175,000
• Replacement of Police Cruisers (Police) $163,198
• Sewer Rehabilitation (Wastewater Division/Public Utilities) $150,000
• Water Line Improvements (Water Division/Public Utilities) $150,000
• Grounds/Median Beautification (Street Div/Public Works) $145,000
• Drainage Projects (Street Division/Public Works) $ 80,000
• Equipment (Parks) $ 70,000
• Sidewalk Replacement Program (Street Division/Public Works) $ 35,000
• Storm Sewer System Improvements (Street Division/Public Works) $ 30,000

Future Projects – The 2007-2011 Capital Improvement Program places a strong emphasis on the City's desire to upgrade and improve its infrastructure throughout the community. In particular, projects such as the flood protection projects, the planned roadway improvement projects, the widening of By-Pass 4 and the I-275 Exit 39 Interchange modifications emphasize the importance of addressing infrastructure needs in the City's growing areas and providing the types and nature of improvements necessary to continue to attract quality development as well as maintain an excellent quality of life in the community. Several of these projects are dependent on grants and other forms of outside funding.

FUND COMMENTARY

General Fund – The City's General Fund continues to have a healthy fund balance. This is due to sound fiscal planning on the Council and staff's parts as well as a successful program for quality economic development in our community. This strengthened fund balance promoted an increase in the City’s reserve fund to be budgeted from 20% to 22% this year. The General Fund reserve balance looks healthy at a minimum through year 2011.

.2% Street Improvement Fund – The .2% Street Improvement Fund has a strong fund balance despite the reallocation of the City Income Tax that was approved in 2002 and which took effect in 2004. There are several large projects that are upcoming that will have an impact on the fund balance: the widening of By-Pass 4, the widening of Seward Rd from Symmes to Tylersville and, finally, the I-274, Exit 39 interchange. At this point, the budget includes debt financing for the widening of By-Pass 4. The private sector funding contributions for the Seward Road widening and the Exit 39 interchange are not clear; therefore, at this time no debt financing has been included in the budget.

Sewer Revenue Fund – The Sewer Revenue Fund will require very close monitoring in 2007 due to the aggressive capital investment being made to the wastewater infrastructure and the issuance of debt required to fund construction. The sewer rate structure that was implemented (as authorized by City Council in 2005) in order to provide adequate revenues to support debt service levels will be completed this year. At this time, it is recommended that a sewer rate study be done to evaluate our rates. If rates are left at the current level, it is unlikely that the Sewer Revenue and Sewer Surplus Funds can support all of the proposed projects listed from 2009 through 2011.

Water Expansion Fund – The Water Expansion Fund will require close monitoring in 2007. The fund currently has sufficient reserves to fund the projects proposed through 2008. However, those projects would deplete the cash balance in 2009 at current rates. It is recommended that a study of the expansion fees be done to evaluate our cash flow situation over the long-term. If fees are left at the current level, the Water Expansion Fund will not be able to support the planned projects from 2009-2011.

DEBT SERVICE--UNVOTED DEBT

In order to finance the level of capital expenditures detailed in the 2007-2011 Capital Improvement Program, the City will need to issue approximately $9.25 million in new notes and/or bonds over the next 5 years. The following debt issues will need to be scheduled:

This debt service schedule represents a significant amount of debt to be undertaken by the City in the next few years. However, the City is in a very good financial position to undertake such borrowing. Presently, the City does carry debt obligations of approximately $39.5 million and will require continued vigilance regarding the use of borrowing to finance additional projects in future Capital Improvement Programs.

CONCLUSION

In summary, the 2007-2011 Capital Improvement Program represents a pro-active approach to capital investment/reinvestment on the part of the City of Fairfield. It addresses the major system maintenance and equipment needs of the City. The CIP also provides for improvements that will carry the City well into the year 2007 and beyond. The Capital Improvement Program exemplifies the strong emphasis the City has historically placed on quality infrastructure and on building effective public/private partnerships within the community. We appreciate the continuing support of the City’s elected officials working with staff in this endeavor.

AEP/MIH