This Capital Facilities Plan (CFP) is a supporting document to the Comprehensive Plan. The CFP identifies what public facilities and services are needed for the planned growth and how to finance them. The information presented in the CFP reflects an evaluation of existing infrastructure and levels of service for the following facilities: 1) general government facilities 2) public safety 3) water 4) sanitary sewer 5) storm water 6) solid waste facilities 7) parks and recreation, and 8) transportation facilities. With a set of proposed capital projects and the related financial plans to carry them out, this CFP provides a clear path forward for infrastructure expansion. The CFP also ensures that infrastructure improvements are provided at the same time as development (“concurrent”) as required by state law.

List of Capital Projects

In 1990, the Washington State Legislature approved the Growth Management Act (GMA) directing local government to control and manage growth within their jurisdictional boundaries. Through this unprecedented action, the State Legislature recognized that uncoordinated and unplanned growth without common goals could impact the environment and effect economic development and the high quality of life for Washington citizens. GMA has significant requirements in the areas of facilities planning and capital improvement financing to ensure that the public facilities and services necessary to support development will be adequate at the time the development is available for occupancy and use. Furthermore, this support must be planned for and funded without decreasing current levels of service below locally established minimum standards.

The statutory requirements for preparing a capital facilities plan under GMA have changed the way comprehensive planning has previously been accomplished. Both the transportation element and the capital facilities element reinforce the requirement that a local government’s comprehensive plans prepared according to GMA be realistic. Specifically, the GMA requires that the Capital Facilities Element of a Comprehensive Plan include an inventory of public facilities, a projection of future needs, and a plan for funding and financing public facilities and infrastructure. This Capital Facilities Plan is intended to provide the technical foundation – inventory of existing facilities, established Level of Service (LOS) standards, proposed projects, and projected funding as appropriate – for the Capital Facilities Element.

Why are capital facilities important? Capital facilities support the growth envisioned in the City’s Comprehensive Plan. The GMA requires that all capital facilities have “probable funding” to pay for capital facility needs, and that jurisdictions have capital facilities in place and readily available for new development or must be of sufficient capacity when the population grows, particularly for transportation concurrency or for services deemed necessary to support development.

This Capital Facilities Plan is a companion document to the Capital Facilities Element of the City of Anacortes Comprehensive Plan. The Capital Facilities Element addresses the City’s capital facilities planning approach and policy framework, while the Capital Facilities Plan is an implementing strategy and planning methodology designed to demonstrate that the Capital Facilities Element is financially realistic and attainable. The Capital Facilities Plan and the Capital Facilities Element, in combination, fulfill the requirement of the State of Washington’s GMA that the comprehensive plan of each jurisdiction planning under the Act include the following elements:

• An inventory of existing capital facilities owned by public entities, showing the locations and capacities of the capital facilities;

• A forecast of the future needs for such capital facilities;

• The proposed locations and capacities of expanded or new capital facilities;

• At least a six-year plan that will finance such capital facilities within projected funding capacities and clearly identifies sources of public money for such purposes; and

• A requirement to reassess the land use element if probable funding falls short of meeting existing needs and to ensure that the land use element, Capital Facilities

Element, and financing plan within the capital facilities plan element are coordinated and consistent. (RCW 36.70A.070)

The Capital Facilities Plan and the Capital Facilities Element are also intended to achieve, primarily, the following planning goal of the GMA:

“Ensure that those public facilities and services necessary to support development shall be adequate to serve the development at the time the development is available for occupancy and use without decreasing current service levels below locally established minimum standards.” (RCW 36.70A.020)

According to WAC 365-196-415, capital facilities to be included in the inventory and analysis of the CFP include, at a minimum water systems, wastewater systems, stormwater systems, schools, parks, trails, and recreation, public safety, and transportation. Capital facilities generally have a long useful life and include both city and non-city operated infrastructure. Capital facilities planning does not cover regular operations and maintenance, but such planning does include major repair, rehabilitation, or reconstruction of facilities.

For the purposes of this plan document, capital facilities projects are generally defined to be any project that possesses all the following characteristics:

Has a useful life of at least 10 years;

Exceeds an estimated cost of $20,000;

Involves totally new physical construction (or equipment procurement), reconstruction designed to gradually and systematically replace an existing system on a piecemeal basis, replacement of a major component of an existing facility, or acquisition of land or structures;

Involves City funding in whole, or in part, or involves no City funds, but is the City’s responsibility for implementing, such as a 100% grant-funded project.

In addition to city-owned infrastructure and facilities, the GMA requires that jurisdictions plan for facilities that are provided by other entities, such as public school facilities. Public school facilities are planned for and provided throughout the UGA by the Anacortes School District. Each county and city must also provide a process for identifying and citing “essential public facilities” within our area. Such facilities could include major regional facilities that are needed but difficult to site, such as airports, state educational facilities, solid waste handling facilities, substance abuse and mental health facilities, group homes and others.

Schools

In the Anacortes UGA, school facilities are planned for and provided by the Anacortes School District. The City provides projected growth information to the School District for its planning purposes. In 2015, the voters passed an $86.9 million bond to partially replace the high school and address other facility needs.

Other Recreational Facilities

The Fidalgo Parks and Recreation District (a special purpose district) operates a public swimming pool and fitness center located at 1603 22nd Street. The pool was constructed in 1975. In 2014 a new fitness center was constructed adjacent to the pool building.

On October 1, 2018 the District Commission voted to move forward with the proposed construction of a new, approximately 40,000 sq. ft. pool facility to better serve the community’s evolving needs. Potential funding includes a combination of private donations and public funds. If adequate funding is obtained, construction of the facility is projected to begin in spring 2021.

In planning for future capital facilities, many factors need to be considered. The process used to determine the location of a new park is very different from the process used to determine the location of a new sewer line. Also, many sources of financing can only be used for certain types of projects. The City conducts detailed planning regarding water, sewer, and stormwater systems; parks and recreation; transportation; and public safety. Planning documents related to each of these facilities include detailed inventories and capacity information, needs analyses, and general financing information. This Capital Facilities Plan, therefore, is the product of many separate but coordinated planning documents, each focusing on a specific type of facility.

The Comprehensive Plan provides goals and policies for capital facilities planning. Policy CF-1.5 states “When planning, developing, and administering the City’s capital facilities plan, give primary consideration to the following:

1. Protect public health and safety.
2. Provide infrastructure to support the vision of Anacortes’s future as articulated in the Comprehensive Plan.
3. Support the provision of City services consistent with the expectations of the community, as expressed in the City’s adopted level of service standards.
4. Maintain, rehabilitate, or replace the City’s facilities and infrastructure as necessary to extend the useful life of existing facilities and ensure continued efficiency.
5. Develop and operate capital investments in a way that is fiscally responsible.”

In addition to established goals and policies, recommendations of local community members and advisory boards are also considered when determining types and locations of projects. Some capital needs of the City are not specifically included in a comprehensive plan, however are important to the quality of life in Anacortes. These projects may not meet the growth management definition of capital facilities because of the nature of the improvement, its cost, or useful life.

The CFP is a financial planning document that satisfies mandatory planning requirements under the Growth Management Act as outlined in RCW 36.70A.070 , and allows the City to apply for grants and authorized funding sources such as REET. The CFP financing plan proposes (vs. provides) an income stream that can finance capital expenditures and the increased operating costs which may result from opening new public facilities. However, projects that are listed in the CFP do not automatically roll into the budget. It is not until budget decisions are made by the City Council that the actual means of financing a project are determined and the actual dollars to be spent on capital costs and operating costs are determined, budgeted, and approved.

Once developed, the CFP makes the budget preparation process easier in that capital outlays will have already been spelled out and the dollar amounts only need be carried across to the budget. The CFP document accompanies the budget as a companion explanatory reference source. The City will perform its activities and make capital budget decisions in conformity with its Comprehensive Plan (RCW 36.70A.120).

Every two years a review process is conducted to update the Capital Facilities Plan, similar to the Operating Budget review process. The Anacortes Municipal Code (AMC 19.16.030.C) outlines the procedural requirements for amendments to the Comprehensive Plan capital facilities planning element and financing plan. Following is a general description of the biennial CFP update process:

1. Recommended Staff Changes

City staff reviews the current CFP and suggests alterations in scope, cost, financing sources or schedule for some of the projects currently in the Plan, then considers a list of entirely new CFP projects. Department managers present their preliminary program to the Mayor for review and changes are made based on overall City goals and priorities.

2. Staff Presentation to the City Council

The Council receives the staff's draft CFP and begins discussing the content. Staff makes presentations detailing the Plan's content and areas of change from the previous Plan.

3. Public Presentations and Feedback

Staff also offers to conduct informational meetings with community groups and the general citizenry. Suggested changes to the CFP that arise from these sessions are forwarded to the City Council.

4. Public Comment Period and Hearing

Public notice of the availability of the draft CFP is provided and the public is invited to comment in writing and/or at a public hearing conducted by the City Council.

5. City Council Review and Adoption

After considering all public testimony, the City Council makes their desired alterations to the CFP, adopts the plan by ordinance, and directs staff to prepare a published document containing the newly revised final CFP and to formally incorporate this into the City's Comprehensive Plan.

Introduction

State Growth Management Act Administrative Code (WAC 365-195-315) recommends that local capital facilities plans include a discussion on “. . . the selection of levels of service or planning assumptions for the various facilities to apply during the planning period (twenty years or more) and which reflect community goals.” This section of this plan will constitute that discussion for the Anacortes Capital Facilities Plan.

Levels of Service

Level of service (LOS) is a term that describes the amount, type, or quality of facilities that are needed to serve the community at desired and measurable standards. These standards vary, based not only on the type of services being provided, but also by the quality of services desired by the community. A community has the option to lower, raise, or maintain the existing levels of service for each type of capital facility and service. This decision will affect both the quality of service provided, as well as the amount of new investment or facilities that are, or will be, needed in the future to serve the community.

Level of service standards state the quality of service that the community desires and for which service providers should plan. The adoption of level of service standards indicates that a community will ensure that those standards are either met, or can be met, at the time development occurs. If such standards cannot be met, the community may decide to decrease the standard, determine how the needed improvements will be paid for, or deny the development.

Capital Facilities Provided by Others

For some of the capital facilities in Anacortes, the City is not the direct provider of service. In the instances where the City does not provide the service, it may contract with either districts or other governmental entities. In some instances, certain public services, such as public transit, other recreational facilities, and school services, are entirely provided through other public entities. In these cases, the City can work collaboratively with those providers to recommend service goals and provide information to ensure that those providers are planning for appropriate growth in the City.

Concurrency

The term concurrency is used in conjunction with LOS standards within the Capital Facilities Element of Anacortes’s Comprehensive Plan and requires that the public facilities and services necessary to support development shall be adequate to serve the development at the same time (concurrent to when) the development is available for occupancy or use, or within a reasonable time as approved by the City, without decreasing current service levels below locally established minimum standards.

When concurrency is applied to a specific development, one of two outcomes is possible:

Outcome 1

When a new development requires capacity of capital facilities that are already in place, then that development has satisfied the concurrency test. Development and occupancy can then proceed.

Outcome 2

When a new development requires capital facilities that do not exist in order to maintain an adopted level of service, then that development does not satisfy the concurrency test. The new enhanced capital facilities must be strategized for, constructed, or bonded. Costs of the new facilities will be borne by the developer’s fair share impact, the City, and possibly other parties participating in the installation of facilities.

Concurrency – what is it?

Concurrency is synonymous with the provision of adequate public facilities for a specific development project. GMA gives numerous statements of standards to follow when analyzing concurrency requirements:

GMA Planning Goals 12 (RCW 36.70A.020)

“. . .public facilities and services. . . shall be adequate to serve the development at the time the development is available for occupancy and use without decreasing current service levels below locally established minimum standards.”

Subdivisions (RCW 58.17.110 (2))

“A proposed subdivision and dedication shall not be approved unless the city, town, or county legislative body makes written findings that: (a) appropriate provisions are made for the public health, safety, and general welfare and for such open spaces, drainageways, streets or roads, alleys, other public ways, transit stops, potable water supplies, sanitary wastes, parks and recreation, playgrounds, schools and school grounds. . .”

Comprehensive Plans - Mandatory Elements (RCW 36.70A.070 (6)(b))

“. . . local jurisdictions must adopt and enforce ordinances which prohibit development approval if the development causes the level of service on a locally owned transportation facility to decline below the standards adopted in the transportation element of the comprehensive plan, unless transportation improvements or strategies to accommodate the impacts of development are made concurrent with the development . . . For the purposes of this subsection, ‘concurrent with the development’ shall mean that improvements or strategies are in place at the time of development, or that a financial commitment is in place to complete the improvements or strategies within six years.”

Impact Fees. (RCW 82.02.050 (1)(a))

“…It is the intent of the legislature . . . To ensure that adequate facilities are available to serve new growth and development.”

Interpretations on Concurrency. (WAC 365-195-070 (3))

“…concurrency should be sought with respect to public facilities in addition to transportation facilities. …Concurrency describes the situation in which adequate facilities are available when the impacts of development occur, or within a specified time thereafter. With respect to facilities other than transportation facilities and water systems, local jurisdictions may fashion their own regulatory responses and are not limited to imposing moratoria on development during periods when concurrency is not maintained.”

Concurrency Applied

The Anacortes Comprehensive Plan addresses concurrency in various goals and policy sections. The Capital Facilities Element of the Comprehensive Plan sets forth the following goals, each with its related policy subsets, relating to concurrency:

Goal CF-1. Support Existing Development and Future Growth. Provide capital facilities and public services necessary to support existing and new development envisioned in the land use element.

Goal CF-2. Level of Service. Utilize level of service standards that correspond with the Land Use Element and provide a realistic assessment of City resources.

Goal CF-3. Correct Deficiencies. Identify deficiencies in public facilities serving existing development based on adopted level of service standards and the means and timing by which those deficiencies will be corrected.

Goal CF-4. Financial Feasibility. Ensure that planned capital facilities are financially feasible.

Goal CF-5. Development Costs. Require new development to pay its share of the cost of new facilities needed to serve such growth and development.

Goal CF-6. Sewer Connection. Develop codes and policies to require connection to the sanitary sewer system when development or subdivision of land occurs.

Goal CF-7. Design & Location. Design and locate capital facilities with features and characteristics that support the environmental, energy efficiency, aesthetic, technical innovation, cost-effectiveness and sustainability goals.

Goal CF-8. Essential Public Facilities. Ensure that Essential Public Facilities are sited and designed in compliance with the State Growth Management Act.

Goal CF-9. Anacortes Airport. Coordinate with the Port of Anacortes in planning activities associated with the airport.

In addition, the Transportation element of the Comprehensive Plan sets forth the following goals, in conjunction with the Countywide Planning Policies:

Goal T-1. Operations, Maintenance, Management and Safety. As a high priority, maintain, preserve, and operate the city’s transportation system in a safe and functional state.

Goal T-2. Greater Safety, Options and Mobility. Invest in transportation systems that offer greater options, mobility, and access in support of the city’s growth strategy.

Goal T-3. Support Growth. Support the city’s and region’s growth strategy by focusing on moving people and goods within the city and beyond with a highly efficient multimodal transportation network for now and into the future.

Goal T-4. Sustainability. Design and manage the city’s transportation system to minimize the negative impacts of transportation on the natural environment, promote public health and safety, and achieve optimum efficiency.

Absence of Concurrency

If a specific development fails to meet levels of service or other plan performance measures, development standards, impact or mitigation fee charges, then that development should not be permitted for construction or occupancy. Furthermore, the City may enact a moratorium on new development if the level of service is not being met or will not be met in six years.

Introduction

RCW Section 36.70A.070 requires that the Capital Facilities Element of the Comprehensive Plan include at least a six-year plan that will finance such capital facilities within projected funding capacities and clearly identify sources of public money for such purposes. The Comprehensive Plan provides a comprehensive list of the various funding sources available.

Funding Categories

For financial accounting purposes, municipal operations are divided into two broad categories: general governmental and proprietary. General governmental activities are primarily tax and user fee supported, while proprietary activities rely primarily on fees generated from rate payers for the sale of goods and services for their operations. Capital improvements for police, fire, parks, administration, and transportation are traditionally general governmental in nature, while water, wastewater, storm drain and equipment rental are proprietary. Although, the State Legislature did approve legislation in 1990 that would allow streets to be established as proprietary rather than general governmental entities. In this plan, the Transportation element continues to remain general governmental in nature.

Capital funding for both general governmental and proprietary categories emanates primarily from operating revenues, with grants, local improvement districts, latecomer, and impact fees frequently contributing substantial sums towards capital construction. General governmental and proprietary operations both use such debt financing strategies as bonding and leasing to help fund improvements. It is at this juncture that the similarities between general governmental and proprietary capital projects diverge. In Washington State, it is generally easier to fund proprietary capital improvements than it is general governmental improvements. To carry out a proprietary capital improvement, there may be an increase in the charges for commodities like water, sewer, and storm drain rates or raising the connection charges or system development charges. In the general governmental area, however, Washington State law limits: 1) the sources municipalities can use to raise funds for capital improvements; 2) the tax rates that can be charged to raise funds for capital improvements; and 3) the amount of general obligation debt capacity that can be issued to raise funds for capital improvements. Again, we note that substantial change in this area has arisen because of the Growth Management Act. GMA authorizes, through proper legislation of the City Council, impact fees for various areas that include: (a) public streets and roads; (b) publicly owned parks, open space and recreation facilities; (c) school facilities; and (d) fire protection facilities in jurisdictions that are not part of a fire district.

Below is a description of the various revenue sources used to fund Capital Facilities:

• Real Estate Excise Tax

• State and Federal Grants

• Impact Fees

• User Fees

• Cash Reserves

Summaries of Revenue and Expenditure Requirements

The availability of revenues is critical to the funding of needed capital facilities. Different sources of revenue have varying statutory or application methodologies which may restrict certain revenues from being utilized for functionally non-related projects. For example, park impact fees may only be used for parks and recreation facilities, utility rate revenues may only be used to fund projects specifically related to the originating utility, or real estate excise taxes may be spent under the parameters of State statutes. At the same time, certain tax revenues may be utilized as funding sources at the discretion of the entity’s legislative body. For example, sales, property, and utility taxes may, at times, be used across departmental functions.

Each category of this section (i.e., General Government, Public Safety, Water System Facilities, etc.) has its own financial plan. Each financial plan: 1) prioritizes projects based upon the criteria mentioned earlier; and 2) lists all the sources of revenues. In addition, each category contains a worksheet listing individual projects with the individual project cost and individual revenue sources presented. Occasionally, individual projects may or may not be scheduled for construction in the same year as the financial plan indicates. These shifts in project timing might depend on funding availability from the various sources and from coordination and timing of other construction projects.

Projects without links are in the process of being updated.

Below is an inventory of existing capital facilities owned by the City, including the locations and capacities of the facilities, where applicable.

Adequate public facilities. Facilities that have the capacity to serve development without decreasing levels of service below locally established minimums.

Assessed Valuation. Refers to how much the total real estate and personal property within a jurisdiction is worth. The value is established by the County Assessor at 100% of appraised market value, and adjusted by the State to account for variations in assessment practices among counties.

Available public facilities. Facilities or services are in place or that a financial commitment is in place to provide the facilities or services within a specified time. In the case of transportation, the specified time is six years from the time of development.

Bonding. Is the act of issuing the debt to finance capital projects and other expenditures.

Budget. A plan of financial operation embodying an estimate of proposed expenditures for a given period and the proposed means of financing them.

Capital Program. A plan for capital expenditures to be incurred each year over a fixed period of years to meet capital needs arising from the long-term work program or otherwise. It sets forth each project or other contemplated expenditure in which the government is to have a part and specifies the full resources estimated to be available to finance the projected expenditures.

Concurrent or Concurrency. Means that adequate public facilities are available when the impacts of development occur. This definition includes the two concepts of “adequate public facilities” and of “available public facilities” as defined above.

General Obligation Debt. Debt that will be repaid mainly by taxes and other general governmental revenues. This debt includes limited and unlimited general obligation bonds, capital leases and other notes and contracts issued with the full faith and credit of the government.

Impact Fee. A fee assessed on new development that creates additional demand and need for public facilities.

Infrastructure. The underlying foundation, especially the basic installations and facilities on which the continuance and growth of a jurisdiction depends, i.e., streets and roads, sewer, and water systems.

Latecomer Fees. Fees paid by developers or future service users for their share of past improvements financed by others.

Leasing. A financing technique whereby ownership of the project or equipment remains with the financing entity, and where title may or may not transfer to the City at the end of the lease.

Local Improvement District (“LID”). A method of carrying out a specific improvement by allocating the costs among the benefiting properties. The project is usually financed through a long term bond issue, and the repayment of which is mainly from the collection of special assessments from the benefiting properties.

Mitigation Fees. Contributions made by developers toward future improvements of City facilities resulting from the additional demand on the City’s facilities generated from the development. See also Fee in Lieu of Charge.

Public Facilities. The capital facilities owned or operated by the City or other governmental entities.

Real Estate Excise Tax (“REET”). A tax upon the sale of real property from one person or company to another.