Capital Improvement Program Summary

Fiscal year 2024-2028

FY2024 Capital Improvement program budget (CIP)

CIP Overview

The Capital Improvement Program (CIP) provides funding for streets, public buildings (both governmental and school facilities), land, and other capital assets. Capital improvement projects generally have a life of 5 years, or more, cost more than $50,000, and are non-operational in nature. City Council adopted budget guidelines and established a policy to allocate an amount no less than 3% of the General Fund budget for capital improvements.

The annual capital budget is part of the City's multi-year Capital Improvement Program, which is designed to coordinate the planning, financing, and construction of capital projects. Separate funding is adopted in the General Fund budget for the smaller maintenance projects, which are handled in the Facilities Repair Fund.

Many factors are taken into consideration during the development of the capital budget. Examples include, the aging of public facilities and infrastructure, the need to accommodate a growing population, and enhancement of quality of life within the City. For these reasons, the City must respond to the capital needs of the community with investments aimed at improving, revitalizing, and maintaining the existing facilities and infrastructure of the City of Charlottesville.

CIP Process and Timeline

The City’s CIP process is designed to coordinate and align capital projects with Council’s strategic priorities and the Comprehensive Plan while also balancing capital investments with available financial resources. The process attempts to capture the true-life cycle cost of the projects – including not only initial construction costs but also operational and replacement costs.

The City’s 5-year capital improvement process typically begins in the fall when City departments receive the CIP submission request forms and related materials to use for the upcoming five-year plan. In addition to submitting requests for new projects, departments are also asked to provide financial updates for existing projects and any projects previously included in the multi-year CIP plan. All materials are submitted to the Office of Budget and Performance Management, which organizes and prepares the submissions for review and prioritization by the CIP Budget Development Committee. The CIP Budget Development Committee consists of the City Manager, Deputy City Managers, Budget Director, Finance Director, and the Budget office staff.

On December 13, 2022, a 5-year CIP plan recommendation was presented to the Planning Commission as part of a public hearing for feedback and approval. After the public hearing, the Planning Commission puts forth its own set of recommendations and proposed changes for City Council to consider.

On March 6, 2023, a Proposed CIP will be formally presented to City Council as part of an overall City Manager Proposed City Operating and Capital Budget. Council will spend time deliberating the proposed plan and may make funding changes until the budget is formally adopted on April 11, 2023.

FY 2024 CIP Revenue Sources

The City uses General Obligation (GO) bonds to finance many of the projects in the CIP. GO Bonds are debt that is backed by the City’s full faith and credit which means the City is obligated to pay back the debt using its ability to collect tax revenue. A bondable project must serve a public purpose (roads, bridges, buildings, parks, etc.) and have a long useful life. Like a mortgage, the bond debt is repaid over time which allows the costs of the project to be spread out over many years and paid for by the current and future citizens who use them. Nonbondable projects are projects which will be cash funded by City revenues, grants and other sources.

The FY 24-28 Capital Improvement Program recommends the use of approximately $129.4 million in long-term debt to finance a portion of the $186.4 million multi-year program. The balance will be funded through transfers of funds from the General Fund, PEG (public, education and governmental) programming fees, revenue sharing funds and other contributions from Charlottesville City Schools. The Capital Improvement Program for FY 24 contains bondable projects totaling $90.4 million, along with non-bondable projects totaling $8.5 million, for a total capital improvement program budget equaling $98.9 million.