Capital Improvement Program

Below is the 2011-2015 Capital Improvement Program for the City of Fairfield, submitted in accordance with Article VI, Section 6.02 (A)(6) of the Fairfield City Charter. This document provides City Council with a comprehensive plan of capital improvements that are being considered by the City over the next five years. Cost estimates, financing methods, and recommended time schedules for the improvements are included in the program and are referenced by individual project.

2011-2015 CAPITAL IMPROVEMENT PROGRAM

The 2011-2015 Capital Improvement Program continues the City's progressive and strategic approach to capital investment. Prudent fiscal policy and investment strategy has allowed the City to continue this comprehensive program, making several adjustments in light of the state of the national economy, in order to continue to address the needs of the City. The budget for 2011 totals $22,998,272. The five (5) year Capital Improvement Program lists $105,776,772 in projects planned through calendar year 2015 with 52% or $54,665,500 anticipated from City funds and 48% or $51,111,272 from outside funding, such as grants or debt.

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 Fund, Recreation Facilities Fund, Water and Sewer Utility Funds, State Issue I 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.

2011 PROJECTS

The projects contained in the 2011-2015 Capital Improvement Program include periodic 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 2011, some of the major projects and their respective costs include:

• I-275 Exit 39 Interchange Modifications at $2.55 million with the total project cost of $14 million (this is inclusive of an estimated $11.45 million in outside funding that has been pre-committed from grants and other government entities).
• Motor Control Replacement for the Wastewater Treatment Plant at $1.2 million with debt financing of $1.15 million.
• Improvements on Resor Road from Windermere to Pleasant at $750,000, of which $254,800 is in outside funding.
• Upgrade of City Department Radio System to the County radio system currently used by Safety Services at $400,000.

Recurring Projects – For 2011, some of the major annual programmed maintenance projects and respective costs include:

• Street Paving & Curb Replacement Project (Public Works) $1,000,000
• Concrete Replacement Project (Public Works) $600,000
• Citywide Computer Hardware Replacement (Finance) $55,000
• Citywide Computer Software Upgrades (Finance) $45,000
• Citywide Computer Infrastructure Upgrades (Finance) $38,000
• Pavement Markings (Public Works) $90,000
• Replacement of Police Cruisers (Police) $15,000
• Sewer Rehabilitation (Public Utilities) $175,000
• Water Line Improvements (Public Utilities) $400,000
• Grounds/Median Beautification (Public Works) $165,000
• Drainage Projects (Public Works) $95,000
• Sidewalk Replacement Program (Public Works) $15,000
• Storm Sewer System Improvements (Public Works) $7,500

Future Projects – The 2011-2015 Capital Improvement Program places a strong emphasis on the City's continuing commitment to upgrade and improve its infrastructure while staying within the City's conservative financial parameters. In particular, projects such as storm sewer and planned roadway improvements emphasize the importance of addressing infrastructure needs and improvements as a means of continuing to attract quality development while maintaining an excellent quality of life in the community. Several of these projects are dependent on grants and other forms of outside funding if implementation is to be achieved.

FUND COMMENTARY

General Fund – The City's General Fund 2011 beginning balance was approximately $7.8 million; however after budgeted operating expenditures in excess of budgeted revenues of approximately $2 million leaves little room above the minimum reserve of $5 million. The General Fund's fund balance has been effected by the global economic conditions and the City's main revenue source (income tax) is projected to decrease in 2011 by 2% under 2010 revenues. Staff will monitor the General Fund Reserve to insure that it remains at a fiduciary responsible level, despite any reductions. Continued vigilance in both operating and capital expenditures will be needed over the next several years to make sure that the City is continuing to spend at sustainable levels.

.2% Street Improvement Fund – The .2% Street Improvement Fund began the year with a solid fund balance inclusive of the reallocation of the City Income Tax that was approved in 2002 and which took effect in 2004. However, several large projects will affect this fund balance: namely, the completion of the widening of By-Pass 4 and the I-275 - Exit 39 interchange as both projects are paid for with City issued debt. This debt will adversely impact the fund balance in future years should all of these projects come to fruition. Future projects will need to be spread over time to meet cash flow availability.

.2% Capital Improvement Fund – The .2% Capital Improvement Fund began the year with a solid fund balance. However, several equipment purchases and projects will impact the fund balance: namely, replacing the Municipal Building boiler and chiller, upgrading of radio equipment, and drainage and drywell improvements. These purchases or projects, along with decreased revenue from income taxes, will adversely impact the fund balance leaving significantly less available funds for 2012 through 2015. Continued vigilance in capital expenditures will be needed over this year and over the next several years to make sure the City is continuing to fund projects at annual acceptable levels.

Sewer Revenue Fund – The Sewer Revenue Fund will require very close monitoring in 2011 due to the aggressive capital investment previously made to the wastewater infrastructure that required the issuance of debt for necessary improvements. City Council authorized a new sewer rate structure in 2008 in order to provide adequate revenues to support debt service levels as well as operations; however, that rate structure passed in 2008 is only good through 2011. Periodic rate studies have permitted this fund to maintain itself over the years to meet current and future expenditures. A new rate study is underway to evaluate needs and mandates from 2012-2016.

DEBT SERVICE--UNVOTED DEBT

The City currently has $36 million in debt obligations with a very healthy bond rating of Aa1. Continued vigilance will be needed to discern the type of debt and its timing in order to maintain the City's healthy financial position. The City's financial position is largely dependent on maintaining adequate reserves for operations and debt capacity. Within the 2011 CIP Budget $3.4 million will be new debt. In the 2011-2015 five-year Capital Improvement Plan the City has tentatively projected the need for an additional $30 million in projects requiring new notes and/or bonds over the next 5 years, which would conceivably increase the debt load from 2010 by 45%, unless some projects are deferred. Staff will continue to monitor the situation and advise Council with appropriate recommended actions over time.

CONCLUSION

In summary, the 2011-2015 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 provides for improvements that will carry the City through 2011 and beyond.

We appreciate the continuing support of the City's elected officials working with staff in this endeavor. 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.