Capital Improvement Program Policy

2021-2022 Annual Budget

A Capital Improvement Program is a schedule of public physical improvements to be constructed with estimated resources available to finance the projected expenditures.


Capital Improvements are any expenditure of public funds for the purchase, construction, rehabilitation, replacement or expansion of the physical assets of the community. Capital expenditures are financed from a variety of sources to include long-term and short-term debt, current revenues, grants from other governmental entities, and donations from foundations, businesses, individuals and non-profit organizations. A detailed listing of financing methods is found on the following pages.

Capital Improvements Program (CIP) Policy

The City of White Settlement prioritizes the funding of capital projects on the basis of a Capital Improvements Plan. The functions of the Capital Improvement Plan are as follows:


  1. Estimating capital requirements.
  2. Scheduling all capital projects over a fixed period with appropriate planning and implementation.
  3. Budgeting priority projects and developing revenue sources for proposed improvements.
  4. Coordinating the activities of various departments in meeting project schedules.
  5. Monitoring and evaluating the progress of capital projects.
  6. Informing the public of projected capital improvements.

Methods of Financing Capital Improvement Projects


Certificates of Obligations

Certificates of Obligations are issued with limited revenues pledged by the water and sewer systems. Voter approval is not required.


Donations

Donations are periodically received, by the City, from individuals, businesses, foundations and non-profit organizations.


Earmarked Funds

With Earmarked Funds, monies are accumulated in advance or set aside for capital construction or purchase.


General Obligation Bonds

With General Obligation bonds, the taxing power of the jurisdiction is pledged to pay interest and principal of the debt. General Obligation Bonds can be sold to finance permanent types of improvements such as municipal buildings, streets, parks and recreation facilities. Voter approval is required.


Revenue Bonds

Revenue Bonds frequently are sold for projects that produce revenues, such as water and sewer systems. Voter approval is not required.


Special Assessments

Public works that benefit particular properties may be financed more equitably by special assessments (i.e., paid by those who directly benefit).


State and Federal Grants

State and Federal Grant programs are available for financing a number of programs. These may include streets, water and sewer facilities, parks and playgrounds. The costs of funding these facilities may be borne completely by grant funds or a local share may be required.

Overlay Projects

Street Improvement Fund


5% Water and Sewer Franchise Fee is placed into a separate fund known as the Street Improvement Fund and shall be used exclusively for construction and improvements of public streets within the City of White Settlement. The franchise fee ordinance was passed on September 14, 1999. Interest is earned on the account and revenues received from street assessments will benefit the fund.


Projects are discussed annually and will involve street reconstruction that will add to the value of life of the infrastructures. The overlays projects provide an effective rehabilitation process, results in longer life to the street, creates a smoother ride of the pavement and allows for greater coverage of the City. Tarrant County manpower is used for the labor through an inter-local agreement with the City of White Settlement.


Street Selection Criteria


  • Roughness
  • Base Condition
  • Curb and Gutter Condition
  • Condition of Underground Utilities

FY 2021-2022 Overlay Projects


  • Downe Drive (Meadow Park Drive to S. Cherry Lane)
  • Mary Kay Lane (School Property to Western Hills)
  • Danny Drive (Downe to the School Property)
  • Western Hills Blvd East Bound Lanes (Meadow Park Drive to just short of Mary Kay Lane)

Current Year Capital Improvement Projects


Historically, in an effort to keep the tax rate low and reduce annual budget expenditures, many capital improvements were delayed over the years. Slowly, with increased property taxes, Capital improvements are being reinstated.


For the 2021-2022 budget, staff requested Council’s consideration of expenditures for projects, equipment, and programs that have a useful life beyond the next annual budget. Ideally, the goal is to fund as much of the City’s needs on a pay-as-you-go basis in the annual “Current Budget”. However, the challenges of spending current resources to fund expenditures with a future useful life are best answered by having a Capital Improvement Plan (CIP) that is financed by long-term or short-term debt. The idea is to cover the costs of maintenance and operations out of the current year budget and minimize the amount of long-term and short-term debt issuance while maintaining a tax rate that is as level as possible.


Capital expenditures requested by each department during the Budget Planning Process were jointly discussed by staff and Council. Remaining funds from the 2015 Tax and Revenue CO’s will be used to fund these capital expenditures. These funds from debt issuance are for the public purpose of constructing street improvements, renovating existing City Facilities, constructing and equipping improvements to the City’s waterworks and sewer system, and acquisition of emergency fire equipment.


The following Approved Items Summary section identifies the capital improvements that have been authorized in FY 2021-2022. It includes the department requesting the item, the fund in which expenditures will be recorded, the sources of funds, and the cost. Although the proposed projects for the 2021-2022 budget year is heavily loaded, staff is working toward an attainable four (4) year forecast. For the 2021-2022 budget, staff will continue to work with Council to develop a more detailed Four Year CIP listing which shows, by year, the items/projects scheduled for each year.


The City does not anticipate that the significant nonrecurring capital expenditures will affect the City’s current and future operating budgets.


Project Selection Criteria


  • Identified in 3rd Party Consultant Studies
  • Staff Identified Maintenance Issues
  • TCEQ Requirements
  • Engineer Priority Projects
  • Development Needs

Funding Sources


  • Capital Bond Funds
  • W/S Capital Bond Funds
  • W/S Revenues
  • Fund Balance
  • Internal Service Fund

Current Year Capital Projects by Function

Current Year Capital Projects by Project

Operational Impacts of Capital Projects

This budget includes funding for water, sewer, and sewer reconstructions, and storm water erosion and stability project.


Note that only new dollars are appropriated for capital projects funds on an annual basis, while funds that are previously budgeted but were unspent at the end of the fiscal year are rolled over into the new fiscal year.

Stormwater

Operational Costs Incurred: This fund is an enterprise fund and rehabilitation projects will be paid for through existing fund balance and an increase in the Stormwater Utilty Fee. Revenues have remained consistent but a rate study has been completed and staff is assessing rate options. Because these expenses represent rehabilitation of existing infrastructure, no increase in operational funding is anticipated. It is possible that projects here will result in marginally decreased workload to staff, but no significant costs associated with that decrease are anticipated. Completing project will prevent erosion of City infrastructure preventing future maintenance needs.

Street Reconstructions

Operational Costs Incurred: Because these expenses represent rehabilitation of existing infrastructure, no increase in operational funding is anticipated. It is possible that projects here will result in marginally decreased workload to staff, but no significant costs associated with that decrease are anticipated. Completing projects will reduce maintenance needs to maintain road conditions.

Water Line Reconstructions

Operational Costs Incurred: This fund is an enterprise fund and rehabilitation projects will be paid for through existing fund balance and an increase in the Water Utility Fee. Revenues were have not been increased during COVID years. Because these expenses represent rehabilitation of existing infrastructure, no increase in operational funding is anticipated. It is possible that projects here will result in marginally decreased workload to staff, but no significant costs associated with that decrease are anticipated. Completing projects will possibly prevent main break maintenance from deteriorating pipes.

Sewer Line Reconstructions

Operational Costs Incurred: This fund is an enterprise fund and rehabilitation projects will be paid for through existing fund balance and an increase in the Sewer Utility Fee. Revenues were have not been increased during COVID years. Because these expenses represent rehabitation of existing infrastructure, no increase in operational funding is anticipated. It is possible that projects here will result in marginally decrease workload to staff, but no significant costs associated with that decrease are antipated. Completing projects will possibly prevent sewer break or sewer choke maintenance from deteriorating pipes.

Street Overlays

Operational Costs Incurred: Because these expenses represent rehabilitation of existing infrastructure, no increase in operational funding is anticipated. It is possible that projects here will result in marginally decreased workload to staff, but no significant costs associated with that decrease are anticipated. Completing projects will reduce maintenance needs to maintain road conditions.