Capital Budgeting Workbook

Capital Budgeting Workbook

Exercise 2: Quiz on Terminology

1. Name two bond rating agencies and describe why their role is important.

2. What is fund balance?

3. What is a G.O. Bond?

4. Describe how a negotiated sale of public debt works?

5. What is the difference in an operating budget and capital budget?

6. What sources of revenue can be used in a pay‐as‐you‐go financing arrangement?

7. List three examples of public‐private partnerships.

8. Which revenue source most easily allows elected officials to fully utilize the benefit principle?

9. What is a basis point?

10. Who votes to approve a bond referendum?

11. Describe the time value of money and its significance in capital budgeting.

Page 1

11 Capital Improvements Program Town of Carrboro FY 2015-16 through FY 2020-21

Sidewalks Project Description In 2003 the citizens approved $4.6 million of general obligation bonds for a sidewalk and greenway construction program. The Town has completed 22 sidewalks covering 4.72 miles.

Sidewalks Completed

Ashe St.

Jones Ferry Rd (at Old Fay.) Bim St.

Lisa Drive

Bolin Forest

Lloyd St. Brewer Lane

N. Greensboro St.

Cheek St.

Old Fayetteville Rd. Davie Rd.

Pine St.

Elm St.

Pleasant Fowler St.

Quail Roost

Hanna St.

S. Greensboro St. James St.

West Main St. (near Post Office)

Jones Ferry Rd. (Rt. 54)

Williams St. The following two projects are expected to be completed in 2015-16 and will complete construction of the planned sidewalks.

Rogers Road sidewalk project (one mile in length) consists of the installation of a 5 foot wide concrete sidewalk on the west side of Rogers Road from Homestead Road to Meadow Run Court. It is funded with a combination of bond funds and STP-DA funds. The project is at 90% design completion and staff is in the process of acquiring easements and right of way. Construction is anticipated in calendar year 2015.

Smith Level Road improvements by NCDOT will include sidewalk installation with the

Town providing a 30 % local match, currently estimated at $42,412. The project is currently under construction and is expected to be completed in FY 2014-15.

Project Benefits This project increases the safety and convenience of walking throughout the Town within neighborhoods and to facilities such as schools, bus stops, shopping areas and recreational facilities. The Town encourages all state road improvements to include sidewalks and bike lanes on both sides of the road and, where feasible. Energy Sustainability Measures A good sidewalk network reduces the reliance on automobiles and thereby reduces the Town’s overall carbon footprint. Operating Impact The construction of new sidewalks is not expected to have an immediate impact on the town’s operating budget. However, in the long-run additional sidewalks will need to be maintained and replaced.

Exercise 3: Examples of Capital Projects

Page 2

12 Capital Improvements Program Town of Carrboro FY 2015-16 through FY 2020-21

ESTIMATED COSTS PRIOR YEARS

2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 & BEYOND

TOTAL PROJECT

Planning/Design 652,476$ -$ -$ 652,476$ Construction 2,908,054$ 288,000$ 864,000$ 4,060,054$ Other 457,308$ -$ 117,000$ 574,308$

TOTAL COST 4,017,838$ 288,000$ 981,000$ -$ -$ -$ -$ -$ -$ 5,286,838$

ESTIMATED FUNDING PRIOR YEARS

2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 & BEYOND

TOTAL PROJECT

Capital Reserves 383,811$ 383,811$ Pay-As-You-Go 11,700$ 11,700$ GO Bond 2,635,585$ -$ 828,678$ 3,464,263$ Intergovernmental Revenues 693,168$ 288,000$ 152,322$ 1,133,490$ Other 293,574$ 293,574$

TOTAL FUNDING 4,017,838$ 288,000$ 981,000$ -$ -$ -$ -$ -$ -$ 5,286,838$


Page 3

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Page 4

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Page 5

FY16-17 CIP Overview

Page 6

Financial Impact

Police, $435,000

Public Works, $397,000

Recreation & Parks,

$331,000

General Fund CIP Project Costs by Department FY16-17

Page 7

Financial Policies

Page 8

Page 9

Capital Improvement Plan

Introduction The Clinton Capital Improvement Plan (CIP) represents a multiyear forecast of the city’s capital needs. The CIP not only identifies capital projects but also the financing required for the projects and their impact on the operating budget. Capital projects differ from annual operating expenses in that they involve large dollar amounts, often require special financing, occur at irregular intervals, and involve development of assets expected to last several years. The City of Clinton prepares a five-year CIP to function as a planning tool for capital improvements. Only the current year schedule, when adopted by City Council, becomes part of the operating budget. The CIP schedule beyond the current fiscal year is subject to adjustments upon annual review by city staff and Council. Future forecasts in the CIP serve the city by helping plan for capital repairs, replacements, and acquisitions, which aids in financial planning to ensure the city’s fiscal health and credit.

Policies and Finance Strategies The CIP helps the city manage capital expenditures to meet the following goals:

1. Eliminate hazards and risks to public health and safety 2. Promote economic development 3. Improve service effectiveness and efficiency 4. Maintain financial stability

To achieve these goals, the following policies and finance strategies guide city staff in CIP development:

A capital project is a physical asset with an initial cost greater than $10,000 and a projected useful life greater than 5 years or a non-recurring operating expenditure greater than $10,000 directly related to service delivery. Capital assets may include infrastructure, buildings, vehicles, or information technology equipment and software. Planning and design costs associated with the request should be included in the projected costs when applicable.

Similar projects costing less than $10,000 should not be lumped together to form a single

project greater than $10,000. Such smaller projects should be included within the upcoming operating budget.

The term of any city debt issue shall not exceed the useful life of the asset for which the debt is

issued.

The capital program will recognize the borrowing limitation of the city to maintain fiscal stability.

Page 10


The city will search for all possible outside funding sources for CIP projects to help offset city debt, including grants, private-partnerships, and intergovernmental agreements.

A financial analysis will accompany the CIP to illustrate the city’s capacity to repay debt and

identify the effects on financial indicators.

The city will seek to maintain financial indicators within an acceptable level as compared to peer cities.

The city will attempt to use pay-as-go financing when possible, particularly for capital assets

with costs less than $75,000. The following is a list of financing options for the City to consider when debt financing is required. General Obligation Bonds. GO bonds require voter approval because the debt is secured by the taxing power of the local government. GO bonds typically have the lowest interest rates and twenty-year terms. The city typically will not consider GO bonds for any project unless the cost exceeds $2 million. Revenue Bonds. Revenue bonds are secured and repaid from specific revenues. These revenues are most often the net earnings from enterprise or self-supporting utilities. Revenue bonds are commonly used to finance water and sewer capital improvements. The city typically will not consider revenue bonds for utility projects unless the cost exceeds $3 million. Installment Purchase Agreements. IP financing can be either short-term or long-term. This type of financing is typically used for items such as equipment and vehicles. Installment purchasing presents the best option for most of the city’s current capital needs. Certificates of Participation. COPs typically have higher interest rates than GO bonds because the debt is secured by funds resulting from project being financed and not the “full faith and credit” of the government. COPs are typically financed for ten- to twenty-year terms. This type of financing should be considered for a revenue-generating project. Tax Increment Financing Bonds. TIF bonds are high risk for investors because the debt is secured on anticipated increases in property value. TIF bonds can be financed for up to thirty years. They do not require voter approval despite their reliance on property or sales tax increases. TIF is complicated in North Carolina and requires approval from the Local Government Commission and consent from Sampson County. Special Assessments. Special assessments are an option if citizens petition for a specific capital project. The government can issue debt to finance the project and the citizens agree to pay part of the project costs through taxes for a set number of years.

Page 11


Assigned Capital Funds. Assigned capital funds represent money set aside each fiscal year for capital projects. The city’s fund balance policy provides for capital funds by committing money for capital projects from the city’s fund balance in excess of the city’s specified range. Committed capital funds are used typically for project contingency and smaller projects.

General Fund/Capital Outlay. This funding is similar to the capital reserve fund except it is money allocated out of the General Fund from the operating budget. There is no debt associated with this funding. This represents a majority of the city’s pay-as-go financing. Water and Sewer Fund. The water and sewer fund operates as an enterprise fund. Revenues generated by water and sewer operations are designated in the water and sewer fund for the water and sewer operating budget as well as water and sewer associated capital outlay. The city maintains a capital reserve fund for specified water and sewer projects. The city designates retained earnings above the city’s specified range for the water and sewer capital reserve fund. Miscellaneous. Other funding sources include grants or donations from private donors or state and federal government. These funding sources often have to be used for a specific project.

Planning Process and Calendar City staff reviews the CIP annually as part of the regular budget process. Preparation for the CIP begins in December of the current fiscal year, at which time department heads meet with staff to review capital needs. At the same time, the City Manager and Finance staff meet to review Council goals, CIP policies, finance strategies, and ranking criteria. In mid-January, departments submit their CIP requests and meet with the City Manager and Finance staff to discuss the projects and estimated costs. Once department heads submit all CIP projects, the City Manager and Finance staff rank the projects using the following criteria and point scale.

1. Addresses Public Safety (20 points) 2. Legally Mandated (20 points) 3. Achieves Council Goal (15 points) 4. Achieves Community Goal (15 points) 5. Availability of Outside Funds (10 points) 6. Increases Service Efficiency (10 points) 7. Promotes Economic Development (10 points) 8. Protects/Maintains City Assets and Financial Stability (10 points) 9. Receives Economic Payback in Less Than 5 Years (10 points) 10. Links with Other Projects (10 points)

The total points for each project merely represent a guideline and are not the determining factor for project funding. City Council must approve projects, which are subject to change based on shifts in Council priorities and the economy. Each project can receive all, half, or no points for each category.

Page 12


City staff performs a financial analysis to estimate the impact of capital projects on the operating budget and the city’s borrowing capacity and debt tolerance. The financial analysis helps determine which projects to fund in each year. Expected budget surpluses and deficits are considered when calculating the financial impact of the CIP. City staff develops a preliminary CIP by mid-March to present to City Council at a CIP workshop to discuss changes and priorities. The final CIP is adjusted based on Council recommendations and presented to the Council for public approval as part of the annual budget document at the June Council Meeting.

FY 2015-2016 CIP and Budget Schedule

Budget Preparation Steps Date

Strategic planning workshop with City Council Tuesday, October 20, 2015 Departments begin meeting internally to develop CIP project requests

Monday, November 30, 2015

Departments submit CIP project requests to Finance & Administration

Friday, January 8, 2016

Administration & Finance review CIP project requests. Department Heads meet with City Manager & Finance staff to discuss CIP project requests

Monday, January 11 – 15, 2016

Strategic planning and goal confirmation workshop with City Council

Thursday, January 21, 2016

City Manager & Finance staff rank CIP project requests & establish a priority list

Tuesday, January 26, 2016

CIP project impact & financial analysis is completed to prepare for operating budget

Wednesday, January 27 – February 12, 2016

Budget packages delivered to departments Friday, February 19, 2016

CIP workshop with City Council Thursday, February 25, 2016

Departments submit budget request Friday, April 1, 2016

City Manager & Finance staff review budget requests & prepare recommendations

Monday, April 4, 2016 – Friday, April 29, 2016

Budget workshop with City Council Tuesday, April 19, 2016

Submit CIP & preliminary FY16-17 budget to City Council Friday, May 6, 2016

Budget workshop with City Council Tuesday, May 17, 2016 Submit recommended FY16-17 budget to City Council for review

Tuesday, May 31, 2016

City Council holds public hearing regarding proposed FY16-17 budget

Tuesday, June 14, 2016

City Council adopts FY16-17 Budget Tuesday, June 21, 2016

Fiscal Year 2016-2017 begins Friday, July 1, 2016

Page 13


Description The CIP consists of four sections: CIP Summary. This section provides a summary of the capital improvement plan in table form. The summary presents the estimated capital costs for each department and the years in which the city expects to assume that debt. There is a summary for the general fund and water and sewer fund.

Individual Project Descriptions. This section explains each CIP project in further detail on the included tables. The tables include the benefits and effects of funding the project as well as the expected method of financing and its impact on the operating budget. Financial Impact Analysis. City staff performs financial analyses to evaluate the impact of the CIP on the operating budget and the city’s debt tolerance. These tables and charts present the potential effects of the CIP on the city’s ability to maintain its current fiscal practices and its ability to borrow money while not compromising its strong financial status. Unfunded Projects. This section provides a brief summary of projects submitted but not included in the current CIP. The summaries include a description of the project and details as to why it is not funded in the CIP.

Page 14

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Page 15

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Capital Projects List

Project Department Estimated

Cost

Outside Funds

Available City's

Obligation FY Funded

Potential Source(s) of

Financing Score

FD Emergency Generator Replacement Fire 67,000$ -$ 67,000$ 19-20 GF,IP 35.0Fire Apparatus Replacement Fire 400,000$ -$ 400,000$ Program CR,IP 72.5Fire Station 2 Construction Fire 1,500,000$ -$ 1,500,000$ FY IP 0.0Fire Vehicle Replacement Fire 125,000$ -$ 125,000$ Program GF 30.0Wall Street Station Renovations Fire 1,287,000$ -$ 1,287,000$ 19-20 GO,IP 82.5Downtown Revitalization Phase IV Planning 1,200,000$ 200,000$ 1,000,000$ 20-21 GR,IP 47.5Elizabeth St. Multi-use Path Planning 650,000$ 200,000$ 450,000$ 19-20 GR,IP,IG 62.5Police Station Addition/Remodel Police 2,100,000$ -$ 2,100,000$ 16-17,18-19 IP 90.0Police Vehicle Replacement Police 628,600$ -$ 628,600$ Program GF 62.5Fleet Vehicle Replacement PW-Garage 120,000$ -$ 120,000$ Program GF 20.0Grounds Cemetery Paving PW-Grounds 75,000$ -$ 75,000$ Program GF 25.0Grounds Equipment Replacement PW-Grounds 48,000$ -$ 48,000$ Program GF 20.0Grounds Maint. Building Renovations PW-Grounds 40,000$ -$ 40,000$ 16-17 GF 10.0Grounds Vehicle Replacement PW-Grounds 60,000$ -$ 60,000$ Program GF 20.0Sanitation Vehicle Replacement PW-Sanitation 605,000$ -$ 605,000$ Program IP 62.5NC 24 Connector Road PW-Streets 1,250,000$ -$ 1,250,000$ FY GO,IP 0.0NC 24 Parallel Road PW-Streets 1,250,000$ -$ 1,250,000$ FY GO,IP 0.0Pedestrian Plan Sidewalks PW-Streets 65,000$ -$ 65,000$ Program GF,GO 80.0Street Equipment Replacement PW-Streets 217,000$ -$ 217,000$ Program GF,IP 20.0Street Resurfacing PW-Streets 1,250,000$ -$ 1,250,000$ Program IG 85.0Street Vehicle Replacement PW-Streets 510,000$ -$ 510,000$ Program GF 20.0Automated Meter Reading Sytem PW-Utility Lines 700,000$ -$ 700,000$ FY IP,WS 0.0Hwy 421 Industrial Park Pump Station PW-Utility Lines 1,025,000$ -$ 1,025,000$ FY IP,WS 0.0NC 24 Expansion Utilities PW-Utility Lines 2,297,000$ -$ 2,297,000$ 18-19 IP,WS 75.0NC 24 Industrial Park Utilities PW-Utility Lines 3,566,800$ 2,433,400$ 1,133,400$ 18-19 IP,WS,GR 85.0NC 24 Parallel Utilities PW-Utility Lines 1,000,000$ -$ 1,000,000$ FY IP,WS 0.0Pierce St. Expansion Utilities PW-Utility Lines 500,000$ -$ 500,000$ 18-19 CR 60.0Utility Lines Equipment Replacement PW-Utility Lines 350,000$ -$ 350,000$ Program WS 20.0Utility Lines Materials Shelter PW-Utility Lines 30,000$ -$ 30,000$ 16-17 WS 20.0Utility Lines Rehab Program PW-Utility Lines 1,000,000$ -$ 1,000,000$ Program WS 80.0Utility Lines Vehicle Replacement PW-Utility Lines 100,000$ -$ 100,000$ Program WS 20.0WWTP Expansion PW-Wastewater 5,000,000$ -$ 5,000,000$ 19-20 PP,RB,GR 92.5WWTP Lime Tower SCADA PW-Wastewater 40,000$ -$ 40,000$ 16-17 WS 37.5WWTP UV Disinfection System PW-Wastewater 600,000$ -$ 600,000$ 19-20 IP 52.5WWTP Vehicle Replacement PW-Wastewater 25,000$ -$ 25,000$ Program WS 20.0WTP and Well Expansion PW-Water 4,836,000$ -$ 4,836,000$ 17-18 IP 80.0WTP Vehicle Replacement PW-Water 50,000$ -$ 50,000$ Program WS 20.0Bellamy Center Roof Recreation 81,000$ -$ 81,000$ 16-17 GF 50.0Bellamy Center Addition Recreation 3,500,000$ -$ 3,500,000$ FY IP 0.0Fisher Drive Park Playground Recreation 60,000$ -$ 60,000$ 19-20 GF,PP 47.5Multipurpose Field Lighting Recreation 175,000$ -$ 175,000$ FY GF 0.0Recreation Equipment Replacement Recreation 61,000$ -$ 61,000$ Program GF 20.0Recreation Vehicle Replacement Recreation 50,000$ -$ 50,000$ Program GF 20.0Royal Lane Park Renovations Ph 1 Recreation 450,000$ -$ 450,000$ 16-17,17-18 CR,GR,GF 65.0Royal Lane Park Renovations Ph 2 Recreation 1,200,000$ 200,000$ 1,000,000$ 20-21 GF,GO,PP 65.0Storage Building Replacement Recreation 25,000$ -$ 25,000$ 16-17 GF 10.0Sampson Center A/C Recreation 75,000$ -$ 75,000$ 17-18 GF 50.0

CR Capital Designated Funds PP Public-Private PartnershipGF General Fund Capital Outlay RB Revenue BondsGO General Obligation Bond SA Special AssessmentIG Intergovernmental Funds WS Water-Sewer Capital OutlayIP Installment Purchase GR Grant

FY=Future Years Program=Varying $ & Years Not Funded

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CITY OF RALEIGH ADOPTED CIP FY2017-FY2021

Parks, Recreation and Cultural Resources

Parks, Recreation and Cultural

Resources Projects FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 5 Year TotalLand Acquisition 100,000 125,000 100,000 125,000 125,000 575,000 Greenway System 300,000 300,000 300,000 300,000 300,000 1,500,000 Cultural Resources 100,000 110,000 300,000 750,000 235,000 1,495,000 Facility Improvements 2,325,000 2,860,000 2,635,000 2,580,000 3,045,000 13,445,000 Plans, Studies & Development 590,000 500,000 845,000 175,000 220,000 2,330,000 Site Improvements 1,660,000 1,500,000 1,315,000 1,615,000 1,670,000 7,760,000 2014 Bond Projects 19,375,000 28,525,000 7,500,000 18,225,000 - 73,625,000 Total Parks, Recreation and Cultural

Resources Capital

24,450,000$ 33,920,000 12,995,000 23,770,000 5,595,000 100,730,000

Revenue Sources FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 5 Year Total2014 Bond Proceeds 19,375,000 28,525,000 7,500,000 18,225,000 - 73,625,000 Transfers from General Fund 3,825,000 4,245,000 4,345,000 4,395,000 4,445,000 21,255,000 Tree Conservation Area Fee 50,000 50,000 50,000 50,000 50,000 250,000 Parks Facility Fees 1,050,000 950,000 950,000 950,000 950,000 4,850,000 Transfers from Revolving Fund 100,000 100,000 100,000 100,000 100,000 500,000 Interest Income 50,000 50,000 50,000 50,000 50,000 250,000 Total Revenue Sources 24,450,000$ 33,920,000 12,995,000 23,770,000 5,595,000 100,730,000

Element Overview

The City of Raleigh Comprehensive Plan, the City of Raleigh Strategic Plan, and the Parks, Recreation and Cultural Resources System Plan are the primary guiding documents for park maintenance and development, level of service and land acquisition. Existing feasibility studies, reports and strategic plans also guide staff on the timing, scope and location of capital investments required to sustain a maturing Parks, Recreation and Cultural Resources system. The PRCR department Capital Improvement Program consists of seven project categories: Land Acquisition; Greenway System; Cultural Resources; Facility Improvements; Plans, Studies and Development; Site Improvements; and 2014 Parks, Recreation and Cultural Resources Bond. Major funding sources for the program include general fund transfers, facility fees, and bond proceeds.

Recent Accomplishments

The Department opened a new facility at Abbotts Creek Park south of the North Wake Landfill Park in northeast Raleigh. The project is a joint venture with Wake County Public School System. The building was designed with sustainable features targeting a Silver LEED certification from the US Green Building Council.

Renovations and accessibility upgrades on three existing facilities were completed at Worthdale Community Center, Millbrook Exchange Community Center and Campbell Lodge at Durant Nature Preserve.

The Schematic Design for Moore Square was approved by City Council and will move forward with construction documents and the permitting process.

Powell Drive Park playground renovation was completed with a generous contribution from the Alpha Kappa Alpha Sorority, Inc., Alpha Theta Omega Chapter. Play equipment was installed by volunteers at a Community Build event.

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Exercise 5: Plan Examples

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The City of Raleigh and the State of North Carolina completed the closing process for the City’s acquisition of 308 acres of the Dorothea Dix Campus. The purpose of the City’s acquisition of the property is to eventually plan and develop a new destination park.

The Arts Plan was adopted by City Council. The Arts Plan provides a vision for the arts and creates an aspirational roadmap to fulfill the 2015 Strategic Plan’s goal for the Arts and Cultural Resources Key Focus Area: “Embrace Raleigh’s diverse offerings of arts and cultural resources as iconic celebrations of our community that provide entertainment, community, and economic benefit.”

Phase 1 improvements at Horseshoe Farm have been completed including: improvements to the entrance drive and dam, parking, signage, walking trails, a picnic shelter, a restroom facility and connection to the Neuse River Greenway system. This project is part of a pilot program for sustainable landscapes that is recognized internationally.

City Council adopted the Master Plan for Wooten Meadow. The proposed plan will address priority items that were identified during an 18-month long process of public input.

Ballfield fencing upgrades were completed at Pullen Park, Buffaloe Road Athletic Park, and Optimist Park.

Tennis courts were resurfaced at Worthdale Park and Spring Forest Park.

Work Plan Highlights

PRCR will continue to focus on projects for FY 2017 as outlined in the 2014 Parks Bond Referendum. Bond projects included are: Park Lighting, Land Acquisition, Greenway Improvements, Building Maintenance, Historic Property Improvements, Walnut Creek Softball Complex improvements, Shelly Lake Comfort Station replacement, Aquatic Improvements, and Pullen Arts Center Improvement.

The Department will continue to implement ADA facility upgrades as documented in the 2012 ADA Assessment Study of the Parks and Recreation Facilities. To maximize efficiency and minimize interruption to user activities, ADA upgrades will be paired with Building Improvements and Community Facility Upgrades when possible.

CIP funds for PRCR will continue to be supplemented with bond funds in order to achieve completion of long awaited park projects.

Operating Impacts

The 5-year capital plan focuses on repair, replacement and upgrade of existing parks facilities. These projects have negligible operating impacts.

The operating impacts of implementing the 2014 bond package will total $1.4M once all projects are complete. This includes roughly 15 new positions to staff new and renovated facilities.

Horizon Items

Raleigh’s park system is mature and aging. Staff will continue to evaluate and prioritize maintenance needs to develop the Capital Improvement Program.

In addition to working with the established Capital Improvement Program, staff is actively pursuing grant and partnership opportunities to introduce supplemental funds and resources.

Land Acquisition

City staff identifies and purchases land for future parks and greenways as directed by the Comprehensive Plan and the Parks System Plan. The primary method of acquiring land is accomplished through a targeted acquisition process. The 2004 Parks Plan identifies Level of Service (LOS) goals and recommended Park Service Areas. Areas in need of parks are identified by combining these measures

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with geographic information system (GIS) data on the size and locations of existing parks. Properties in these areas are then analyzed to determine their suitability as park sites. City Council approves all park land acquisitions. Greenway land is usually conveyed to the City through greenway easements and fee simple transactions. The City’s acquisition of greenways is guided by the Capital Area Greenway System corridors. The City requires dedication of land for greenways from residential developments that fall along these corridors or other planned greenway connectors. Developers of non-residential properties may also be required to reserve a portion of their property for greenways. Additionally, planned greenway trail projects may require greenway land to be acquired. The limited annual funds in this category typically cover cost for appraisal and legal procedures associated with land acquisition.

Land Acquisition FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 5 Year TotalPark Site Acquisition - 25,000 - 25,000 25,000 75,000 Greenway Acquisition 100,000 100,000 100,000 100,000 100,000 500,000 Subtotal 100,000$ 125,000 100,000 125,000 125,000 575,000 Highlighted Projects Greenway Acquisition: $500,000 This project funds annual greenway acquisition. This is an ongoing program to acquire greenway land including missing greenway segments and reimbursements for dedicated greenway easements that become available during development site plan approval procedures.

Greenway System

The Capital Area Greenway System is a network of public open spaces and recreational trails, which provides for activities such as walking, jogging, hiking, bird watching, nature study, fishing, picnicking and outdoor fun. In addition to recreation, users appreciate ecological features in their natural state along the greenway. Trails connect many of Raleigh's parks and neighborhoods. The goal is to establish a completed network of interconnected trails throughout the city. The greenway category includes greenway development, trail repaving, structures and boardwalk repairs. The Capital Area Greenway master plan has been adopted by City Council and sustained funding is necessary to work towards completion, repair and maintenance of the existing facilities and enhancement of older facilities. The greenway system consists of over 4,000 acres of land and over 100 miles of trails throughout the city.

Greenway System FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 5 Year TotalGreenway Trail Resurfacing 100,000 100,000 100,000 100,000 100,000 500,000 Greenway Boardwalk Repair 100,000 100,000 100,000 100,000 100,000 500,000 Structure Repair & Replacement 100,000 100,000 100,000 100,000 100,000 500,000 Subtotal 300,000$ 300,000 300,000 300,000 300,000 1,500,000

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CIP PROJECT SUMMARY General - Downtown Development

Downtown Enhancement SAFETEA Project

As part of reauthorization of the Federal Transportation Bill (SAFETEA-LU), the City of Rocky Mount received an earmark of $4,359,168 to fund improvements within downtown. The City's 20% match of the federal grant is $1,088,525. CSX is to contribute an additional $75,000, and an additional $275,000 is available for projectsrelated to TSS. Matching funds are provided by Powell Bill transfers and other General Fund revenue. This project is performed through a Memorandum Agreement between the City and NCDOT.

Description

JustificationStrategy B-3 in Economic Development and Strategies H1,H2, and H4 address the investment in transportationenhancements and other improvements necessary to reinvigorate Downtown Rocky Mount.

Category10 - Expansion of service is deemed necessary

Complete?Past Progress

NoFY2007 - Planning and design work.

NoFY2008 - Design continued, extension of Goldleaf, removal of tanks (by CSX), and demolition of Cannon Building.

NoFY2009 - Continued design work, construction to commence Summer 2009.

NoFY2010 - Construction and Douglas Block improvements.

Future Plans

FY2011 - Continued construction.

FY2012 - Continued construction (Funded in FY2011).

FY 2014 Prop

FY 2013 Prop

FY 2012 Prop

FY 2011 PropDescription

RevenuesFuture Years

FY 2010 Proj

CIP Total

FY 2015Prop

- - - - -General Fund -15,000 -

570,000 - - - -Enterprise Fund -642,000 570,000

333,000 - - - -Powell Bill Allocation -333,000 333,000

1,250,000 - - - -Federal Grant -2,750,000 1,250,000

$2,153,000 $- $- $- $-Total Revenues $-$3,740,000 $2,153,000

ExpendituresFuture Years

CIP TotalDescription

FY 2014 Prop

FY 2013 Prop

FY 2012 Prop

FY 2011 Prop

Future Years

FY 2010 Proj

FY 2015Prop

3,740,000 2,153,000 - - - - -Construction 2,153,000

- - - - - - -Planning/Design -

$3,740,000 $2,153,000 $- $- $- $- $-Total Expenditures $2,153,000

Rocky Mount CIP Example


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CIP PROJECT SUMMARY General - Douglas Block

Douglas Block Redevelopment

These funds will be used to implement the redevelopment of the Douglas Block. FY 2005-06 includes a $180,000 Environmental Protection Agency (EPA) Brownfield Assessment grant for the block and FY 2006-07 includes $200,000 from EPA for a Brownfield Clean-up grant. The City has submitted a request for a $1,800,000 Section 108 loan, which will begin in FY 2006-07. Repayment of the Section 108 loan is over 20 years. The estimated repayment of the loan with be 50% from CDBG grant funds and 50% from the general fund. Additional current revenues are provided to assist with the GAP funding of the redevelopment process.

Description

JustificationIn 2005, the Rocky Mount City Council adopted the Douglas Block Redevelopment Plan that calls for a mixed useproject on the Douglas Block. The plan has already leveraged EPA Brownfield grant funds.

Category10 - Expansion of service is deemed necessary

Complete?Past Progress

NoFY2007 - Initial planning.

NoFY2008 - Planning, appraisal, and land acquisition.

NoFY2009 - Planning, appraisal, and land acquisition; restoration of Booker T theatre roof.

Future Plans

FY2011 - Work of redevelopment entity continues. Additional City-funded improvements.

FY2012 - Street construction and supporting property acquisition.

FY 2014 Prop

FY 2013 Prop

FY 2012 Prop

FY 2011 PropDescription

RevenuesFuture Years

FY 2010 Proj

CIP Total

FY 2015Prop

100,000 300,000 100,000 - -General Fund -175,000 500,000

- - - - -Federal Grant -285,000 -

$100,000 $300,000 $100,000 $- $-Total Revenues $-$460,000 $500,000

ExpendituresFuture Years

CIP TotalDescription

FY 2014 Prop

FY 2013 Prop

FY 2012 Prop

FY 2011 Prop

Future Years

FY 2010 Proj

FY 2015Prop

285,000 - 100,000 - - - -Construction 100,000

- 100,000 - - - - -Improvements 100,000

- - 200,000 100,000 - - -Land Acquisition 300,000

175,000 - - - - - -Planning/Design -

- - - - - - -Section 108 Loan Pmt -

$460,000 $100,000 $300,000 $100,000 $- $- $-Total Expenditures $500,000

Operating ImpactsFuture YearsDescription

FY 2014 Prop

FY 2013 Prop

FY 2012 Prop

FY 2011 Prop

Future Years

FY 2010 Proj

FY 2015Prop

100,000 50,000 - - - - - Recurring

)(75,000 )(75,000 )(75,000 )(75,000 )(75,000 )(75,000 )(450,000CD Contribution to L Recurring

- )(50,000 )(50,000 )(50,000 )(50,000 )(50,000 )(50,000Rent Revenue Recurring

$25,000 )$(75,000 )$(125,000 )$(125,000 )$(125,000 )$(125,000 )$(500,000Total Impact

Rocky Mount CIP Example


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County Goals and Financial Policies

53

Upon each vacancy, fully evaluate the needs of the position to ensure an updated job description is posted allowing for recruitment of an individual the necessary skill set for being successful in the position. Additionally, evaluate the allocation of positions across all County departments to ensure allocations promote efficient and effective delivery of County services. Risk Management: Continue to collaborate with our consultant to reduce the rising health care costs for our self-funded insurance program in order to ensure the program is sustainable into the future. Continue to implement a wellness incentive whereby participating employees will get free biometric screening and health coaching along with a discounted rate for health insurance. In the longer term, participants will have targeted goals for the biometric measures that will have to be met. Ten-Year Capital Plan: Continue to maintain and monitor the capital improvement plan and fund needs from Capital Reserve Funds. A more detailed explanation of the Capital Improvement Plan can be found on page 159 of this document in the Capital and Debt Management Section.

Fiscal Policy Guidelines Objectives This fiscal policy will influence and guide the financial management practice of Moore County, North Carolina. A fiscal policy that is adopted, adhered to, and regularly reviewed is recognized as the cornerstone of sound financial management. Effective fiscal policy:

Contributes to the County's ability to insulate itself from fiscal crisis,

Enhances short term and long term financial credit ability by helping to achieve the highest credit and bond ratings possible,

Promotes long-term financial stability by establishing clear and consistent guidelines,

Directs attention to the total financial picture of the County rather than single issue areas,

Promotes the view of linking long-run financial planning with day to day operations, and

Provides the County Staff, the County Board of Commissioners and the County citizens a framework for measuring the fiscal impact of government services against established fiscal parameters and guidelines.

This policy will be reviewed annually by County staff with any changes to be approved by the Board of Commissioners.

To these ends, the following fiscal policy statements are presented.

Moore County Financial Policies

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Capital Improvement Budget Policies

1. It is the responsibility of the County Board of Commissioners to provide for the capital facilities necessary to deliver municipal services to the citizens of the County, as well as facilities for the Moore County Public School and Sandhills Community College systems.

2. The County will consider all capital improvements in accordance with an adopted Capital Improvement Plan.

3. The Capital Improvement Plan is inclusive of Capital Improvements (renovations), Capital

Replacement (vehicles and heavy equipment) and Major Capital Projects (new buildings).

4. The County will develop a ten-year Capital Improvement Plan and review and update the plan annually. The Moore County Public Schools and the Community College System will submit their respective ten-year capital improvement requests annually and will provide a prioritization for the improvements within their request for the County Commissioner’s review.

5. The County will enact an annual capital budget based on the ten-year Capital Improvement Plan,

while considering changes in population, changes in real estate development, or changes in assumptions in the capital budget projections.

6. The County, in consultation with the Moore County Public School and Community College Systems,

will coordinate development of the capital improvement budget with development of the operating budget. Future operating costs associated with new capital improvements will be projected and included in operating budget forecasts.

7. The Capital Improvement Plan will include the estimated costs for the County to maintain all

County, Public School and Community College assets at a level adequate to protect the public’s welfare and safety, the County's capital investment and to minimize future maintenance and replacement costs. A maintenance and replacement schedule will be developed and followed based upon these estimates.

8. The County, in consultation with the Moore County Public School and Community College Systems, will identify the estimated costs and potential funding sources for each capital project proposal before it is submitted for approval.

9. The County will adopt the most cost effective financing consistent with prudent financial

management. Debt Policies

1. The County will confine long-term borrowing to capital improvements or projects that cannot be financed from current revenues except where approved justification is provided.

2. The County will take a balanced approach to capital funding utilizing debt financing; capital reserves

and pay-as-you go funding that will provide the least financial impact on the taxpayer. Pay-as-you-go funding will come from budgeted appropriations.


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55

3. When the County finances capital improvements or other projects by issuing bonds or entering into capital leases, it will repay the debt within a period not to exceed the expected useful life of the project. Target debt ratios will be annually calculated and included in the review of financial trends.

4. Net debt as a percentage of estimated market value of taxable property shall not exceed 2.0%. Net

debt is defined as any and all debt that is tax-supported.

5. Should the ratio of debt service expenditures as a percent of total governmental fund expenditures exceed 15.0% staff must request an exception from the Board of Commissioners stating the reason and length of time.

6. The County will retire tax anticipation debt, if any, annually and will retire bond anticipation debt

within six months after completion of the project.

7. Payout of aggregate outstanding tax-supported debt principal shall be no less than 55.0% repaid in 10 years.

(Note: Excludes Enterprise Fund Debt which is assumed to be Self-Supporting) Reserve Policies

1. Unassigned General Fund Balances will mean funds that remain available for appropriation by the County Board after all considerations for future expenditures, required restrictions defined by State statutes, and previous Board commitments have been calculated. The County will define these remaining amounts as “available fund balances”.

2. Available fund balances at the close of each fiscal year should be at least 15.0% of the Total Annual

Operating Budget of the County with a Targeted Policy equal to 20.0%.

3. The County Board may, from time-to-time, utilize fund balances that will reduce available fund balances below the 15.0% policy for the purposes of a declared fiscal emergency or other such global purpose as to protect the long-term fiscal security of Moore County. In such circumstances, after available fund balances have been calculated as part of closing-out a fiscal year, the Board will adopt a plan as part of the following year’s budget process to restore the available fund balances to the policy level within 36 months from the date of the budget adoption. If restoration cannot be accomplished within such time period without severe hardship to the County, then the Board will establish a different but appropriate time period.

4. Monies in excess of a 15.0% available fund balance will be transferred to a Capital Reserve Fund for

future use for a specific purpose within a specified time frame except as provided for in the Resolution for Funding for Dempsey Hall Student Center Expansion and Deferred Maintenance Cost for Sandhills Community College, adopted by the Moore County Board of Commissioners on June 17, 2014, effective July 1, 2014.


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Budget Development Policies

1. The County Budget Process begins with a Board of Commissioners Retreat to be held no later than January 31st of each year.

2. The Budget Process will be compliant with the North Carolina Local Government Budget and Fiscal

Control Act.

3. One-time or other special revenues will not be used to finance continuing County operations but instead will be used for funding special projects.

4. The County will pursue an aggressive policy seeking the collection of current and delinquent

property taxes, utility, license, permit and other fees due to the County. Cash Management / Investment Policies

1. It is the intent of the County that public funds will be invested to the extent possible to reduce the dependence upon property tax revenues. Funds will be invested with the chief objectives of safety of principal, liquidity, and yield, in that order. All deposits and investments of County funds will be in accordance with N.C.G.S. 159.

2. The Finance Director will establish a Cash Management Program that maximizes the amount of cash

available for investment. The Program shall address at a minimum; Accounts Receivable/Billings, Accounts Payable, Receipts, Disbursements, Deposits, Payroll and Debt Service Payments.

3. Up to one-half (50%) of the appropriations to Non-County Agencies and to non-debt-supported

capital outlays for County Departments can be encumbered prior to December 31. Any additional authorization shall require the County Manager’s written approval upon justification. The balance of these appropriations may be encumbered after January 1, upon a finding by the County Manager that there is a reasonable expectation that the County’s Budgeted Revenues will be realized.

4. The County will use a Central Depository to maximize the availability and mobility of cash for all

funds that can be legally and practically combined.

5. Cash Flows will be forecasted and investments will be made to mature when funds are projected to be needed to meet cash flow requirements.

6. Liquidity: No less than 20% of funds available for investment will be maintained in liquid

investments at any point in time.

7. Maturity: All investments will mature in no more than thirty-six (36) months from their purchase date.

8. Custody: All investments will be purchased “payment-verses-delivery” and if certificated will be held

by the Finance Officer in the name of the County. All non-certificated investments will be held in book-entry form in the name of the County with the County’s third party Custodian (Safekeeping Agent).


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9. Authorized Investments: The County may deposit County Funds into: Any Board approved Official

Depository, if such funds are secured in accordance with NCGS-159 (31). The County may invest County Funds in: the North Carolina Capital Management Trust, US Treasury Securities, US Agency Securities specifically authorized in GS-159 and rated no lower than “AAA”, and Commercial Paper meeting the requirements of NCGS-159 plus having a national bond rating.

10. Diversification: No more than 5% of the County’s investment funds may be invested in a specific

company’s commercial paper and no more than 20% of the County’s investment funds may be invested in commercial paper. No more than 25% of the County’s investments may be invested in any one US Agency’s Securities.

11. Allocation: Investment income will be allocated to each participating fund or account based on a fair

and equitable formula determined by the Finance Director. The County will maintain segregated accounts with the North Carolina Capital Management Trust for each of the fund types.

12. Reporting: Not less than twice a year the Finance Director will report to the Manager on the Cash

Flow Forecast for the ensuing twelve months. The Finance Director also will report on the interest earned in the past six months and on the current investment portfolio including: type of investment, purchase date, price, par amount, maturity date, coupon rate, and any special features. The Chief Finance Officer will also provide a Financial Summary inclusive of Investment Reporting to the Board of Commissioners as requested.

Enterprise Funds The County maintains Enterprise Funds (primarily water and wastewater) that are self-sustaining for both operational and capital purposes. The Enterprise Funds will adhere to the County’ Fiscal Policy with any exceptions being reported in this section.

These policies will allow for orderly expansion of services and to allow operation within the financial framework insuring efficiency while providing necessary services.

They promote long-term financial stability.

They insure future viability by guaranteeing rates that maintain constant in conjunction with inflation.

Budget Policies:

Enterprise Funds will develop a fifteen-year capital improvement plan, which will be reviewed and updated annually.

Any improvements required to meet new regulatory requirements or to meet changes in the service demands will be included in the annual budget request.

Service rates will be reviewed annually as part of the budget process.

Service rates will be adjusted based upon the December Consumer Price Index for Southeastern United States.

Service rates will be adjusted as necessary due to debt service obligations.

Each Enterprise Fund will maintain a retained earnings level that is no less than an amount equal to 8% of its operating expenses.

Each Enterprise Fund will maintain a Capital Reserve Fund sufficient to meet future capital needs.


Page 27

bryan.thompson

Highlight


58

Individual projects costing over $500,000 will be financed.

Individual projects costing under $500,000 will be appropriated from either retained earnings or the Capital Reserve Fund.

Debt Policies:

Enterprise Funds will limit long-term borrowing to individual projects costing over $500,000.

Each Enterprise Fund is responsible for its own debt service.


Page 28

Chatham County FY 2016-2017 Budget Calendar

Deadline Actions

4 September 2015 Capital Improvements Program (CIP) forms distributed to agencies

5 October 2015 Forms due from agencies and departments for new/changed CIP projects

2 November 2015 Manager submits recommended CIP to the Board of Commissioners at a special meeting

Heads Up document due from departments

16 November 2015 Hold public hearing on the proposed CIP

17 November 2015 Work session on the proposed CIP

14 December 2015 Board adopts CIP

23 December 2015 Budget summit materials (trends, financial indicators, performance team recommendations, and departmental “Heads Up” document) submitted to Board of Commissioners

Work plan and new position forms distributed to departments

Weeks of January 4 and 11, 2016

Budget Summit: Board of Commissioners sets goals and guidelines for FY 2016-2017 budget

29 January 2016 Requests for new positions and work plans (with goals, objectives, and performance targets) due from departments

Remaining budget forms distributed to departments/agencies

4 March 2016 Budgets due from departments and agencies (except schools)

18 April 2016 Budget due from schools

2 May 2016 Budget submitted to Board of Commissioners and public at a special meeting

May 16 and 17, 2016 Official public hearings held in Pittsboro and Siler City

Late May and early June, 2016

Board of Commissioners holds 2 budget work sessions

By 30 June 2016 Board of Commissioners adopts budget (legal deadline)

Calendar Examples

Page 29

64 Budget Calendar for Fiscal Year 2017 2017 Fiscal Year Adopted Budget

Budget Calendar for Fiscal Year 2017

Date Budget ActivityOctober 13, 2015 Capital Improvement Program (CIP) Kickoff with Core Team

November 13, 2015 CIP Core Team members submit FY 2017-2023 Capital Requests

December 8, 2015 Operating Budget Kickoff with Extended Management Team

February 1, 2016 Departments submit FY 2017 Operating Budget Requests, Expansion Requests, Reduction Options

February 13, 2016 Board of Commissioners retreat to adopt goals and set priorities for the FY 2017 budget

January - April 2016 Capital Improvement Program and Operating Department budget meetings

March/April Board of Education and Wake Technical Community College submit formal budget requests

May 9, 2016 Review of FY 2017-2023 Recommended Capital Improvement Program at Board of Commissioners Work Session

May 16, 2016 Formal presentation of Recommended Budget and Improvement Plan to Board of Commissioners at regularly scheduled meeting

June 6, 2016 Public Hearing on Operating Budget, Capital Improvement Program and any proposed fee or tax changes

June 13, 2016 Special Budget Work Session with Board of Commissioners

June 20, 2016 Adoption of FY 2017 Operating Budget and FY 2017 - 2023 Capital Improvement Program at regular Board of Commissioners meeting

Wake County Budget Calendar Example Calendar Examples

Page 30

Exercise 7: Prioritization Exercise Pretend NC cities and counties have the same responsibilities. Prioritize the following projects:

A new elementary school to alleviate overcrowding

A water plant upgrade to meet EPA guidelines that will take effect in 4 years

Replacement of an outdated emergency communications system

Downtown improvements to attract investment

Your Plaque Project

Questions:

1. What criteria did you use to set your priorities?

2. Will your elected colleagues agree?

3. How will you be viewed during the next election cycle?

4. Did your plaque project from this morning land on top?

5. How will you decide on how to move on the other four priority projects?

6. What if your elected colleagues have a few other projects in mind that are not shown on your list?

7. How will you convince citizens to concur with your personal ranking?

Page 31

The CIP Ranking Process

The CIP for FY2014-FY2018 is the first capital budget process since FY2009 whereby departments and business partners submitted new capital projects for consideration. The projects submitted for the CIP totaled 149 and 116 projects were approved. The County CIP Review Committee evaluated all submitted capital projects for FY2014-FY2018. The projects were prioritized based on the ranking criteria approved by the BOCC.

5% of capacity allocated for Open Space Land Acquisition

Rating Criteria Definition / Explanation FY14

Points

Mandates / Contractual Extent to which a project helps the County meets federal / state mandates or contractual obligations. (Mandates will be based on the Choice Matrix with definition for levels below). Mandated vs. Discretionary

No Program Choice / No Funding Choice No Program Choice / Funding Choice Program Choice / No Funding Choice Program Choice / Funding Choice Needed for Contractual obligation Not needed for Contractual obligation

5 - 20 0 - 5

20 15 10 5 5 0

Building Safety Extent to which a project addresses a safety hazard to public or employees based on risk level. Definition for levels is below. Risk is Critical Risk is High Risk is Low No Risk involved

0 – 20

20 13 6 0

Economic Outcome Extent to which project enhances economic development in county using the Business Investment Program model. 100% - 76% Net Present Value 75% - 51% Net Present Value 50% - 26% Net Present Value 25% - 1% Net Present Value 0% Net Present Value

0 – 20

20 15 10 5 0

Funding Source Extent to which project construction can be financed with County revenue. Non-County revenue examples are fees, grants, donations, etc.

0% County-funded Up to 50% County-funded 51 -75% County-funded 76 - 99% County-funded 100% County-funded

0 – 15

15 8 6 3 0

Board Priority Linkage of project to one of the Board’s operating priority levels. Priority 1 Priority 2 Priority 3 Priority 4 Priority 5 Priority 6 Priority 7

1 – 10 10 8 6 4 3 2 1

Operating Budget Outcome **If all projects ranked for a dept. total more than 10% of total county funded for that dept., points will be reduced accordingly

How project impacts the department’s current County-funded operating budget upon completion. Decrease operating budget No operating budget impact Increase of not more than 3% of Department County-funded budget Increase of not more than 5% of Department County-funded budget Increase of over 5% of Department County-funded budget

0 – 10

10 8 7 3 0

Joint Use Savings Extent to which project is a collaboration with other governmental entities and/or business partners (County, City, Towns, CMS, CPCC, Library).

Capital savings of 26% - 50% of County-funded Capital savings of 11% - 25% of County-funded Capital savings of 1% - 10% of County-funded No Capital savings

0 – 10

10 7 3 0

Growth Extent to which population has increased. 127% or more 96% - 126% 64% - 95% 33% - 63% 32% or less

3 – 15 15 12 9 6 3

Timeliness Extent to which all projects started in the fiscal year requested in. If a project did not start in the fiscal year requested a penalty will be assessed on all unranked projects during the next ranking process.

(10)

470

Page 32

Exercise 8: Moody's Scorecard

Page 33

Previous Year

Current Year Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7

FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023A. Personnel Costs

Regular Salaries 0 0 0 0 0 58,807 60,571 62,388 64,260Health 0 0 0 0 0 18,098 18,641 19,200 19,776

Life 0 0 0 0 0 47 49 50 52Dental 0 0 0 0 0 943 971 1,001 1,031

Workers Comp 0 0 0 0 0 1,268 1,306 1,345 1,385FICA 0 0 0 0 0 4,904 4,634 4,773 4,916

Retirement 0 0 0 0 0 4,532 4,668 4,808 4,952401K 0 0 0 0 0 2,884 2,971 3,060 3,152

List other personnel costs:0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0

B. One-Time Supplies/EquipmentUniforms 0 0 0 0 0 1,000 0 0 0

Office Supplies 0 0 0 0 0 6,218 0 0 0Advertising 0 0 0 0 0 800 0 0 0

Small Tools & Equipment 0 0 0 0 0 2,500 0 0 0Telephone/Communications 0 0 0 0 0 0 0 0 0

List other one-time supplies/equipment:0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0

C. Ongoing operational costsTelephone/Communications 0 0 0 0 0 652 672 692 713

Gasoline 0 0 0 0 0 5,614 5,782 5,955 6,134Training 0 0 0 0 0 2,245 2,313 2,382 2,454

Contracted Services 0 0 0 0 0 7,985 8,224 8,471 8,725Electricity 0 0 0 0 0 34,242 35,270 36,328 37,418

Water 0 0 0 0 0 26,945 27,753 28,586 29,4430 0 0 0 0 0 0 0 1

List other ongoing operational costsBuilding Maintenance 0 0 0 0 0 449 463 476 491

Equipment Maintenance 0 0 0 0 0 0 0 0 1Medical Supplies 0 0 0 0 0 5,164 5,319 5,479 5,643

Printing 0 0 0 0 0 1,684 1,735 1,787 1,840Advertsing 0 0 0 0 0 1,123 1,156 1,191 1,227

Medical Exams 0 0 0 0 0 225 231 238 2450 0 0 0 0 0 0 0 0

D. Capital OutlayEquipment 0 0 0 0 0 0 0 0 0

Vehicles 0 0 0 0 0 0 0 0 0List other ongoing operational costs

0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0

E. Cost Savings/RevenueList cost savings and revenue by line item

Rent-Lease Space 0 0 0 0 0 -10,737 -10,737 -10,737 -10,737All electric--gas goes away 0 0 0 0 0 -9,500 -9,500 -9,500 -9,500

Totals:Increased Costs 0 0 0 0 0 188,329 182,728 188,210 193,858Decreased Costs 0 0 0 0 0 -20,237 -20,237 -20,237 -20,237Net Total 0 0 0 0 0 168,092 162,491 167,973 173,621

Project: Animal Shelter Expansion & Renovation

The following are “typical” areas that departments may find increased operational costs when obtaining new equipment and/or constructing a new facility. However, if the following do not address your increased costs, please feel free to use the space marked “other” at the end of each category. When adding items, please include the description in column A and the account code in column B.

The purpose of this form is to offer a mechanism for listing projected increases in operational costs associated with a CIP project.

CHATHAM COUNTYCAPITAL IMPROVEMENTS PROGRAMCIP‐2: Operational Costs Worksheet

Operating Cost Example

Page 34

Exercise 2: Quiz on Terminology Answers:

[Source: Justin Marlow, William C. Rivenbark, and A. John Vogt. 2009. Capital Budgeting and Finance: A Guide for Local Governments, 2nd edition. Washington, DC: ICMA.] 1) Bond rating agency An agency that evaluates and rates debt. Three national agencies rate local government debt in the

United States: Standard & Poor’s Corporation, Moody’s Investors Service, and Fitch/IBCA. They rate local government bonds or debt at the request of the issuer, and the issuer pays for the ratings.

2) Fund balance The difference between a governmental fund’s assets and liabilities. Portions of the fund balance may be reserved or designated, for the purchase of capital assets.

3) General obligation (G.O.) bond A bond secured by a governmental issuer’s pledge of unlimited taxing power. G.O. bonds

also are known as full‐faith‐and‐credit debt because of the unconditional pledge to repay the debt with all possible revenue‐raising capabilities. In many states, the authorization of G.O. bonds requires the approval of voters in a referen‐dum.

4) Negotiated public sale of debt A sale of debt in which the issuer first selects an underwriter or underwriting group to

handle the sale. The underwriter and the issuer negotiate and agree on debt structure and pricing. The underwriter advertises and markets the debt to potential investors, buys the debt from the issuer, and resells it to investors.

5) Operating budget A budget that identifies revenues and spending for ongoing services and activities. Most operating

budgets are prepared and enacted annually and are called annual budgets. The revenues and spending are or should be balanced for the year or operating period. The recommended operating budget is typically prepared by the city/county manager and presented in an annual budget document. That document also may contain the recommended capital budget for the year. The legally enacted operating budget is approved by the governing board in an annual budget ordinance or resolution. Capital budget A budget that identifies and balances revenues or other financial resources and spending for the acquisition or construction of major capital projects or assets. The recommended capital budget often originates from the first year of a multiyear capital improvement program.

6) Pay‐as‐you‐go capital financing Paying for capital projects and acquisitions from sources other than debt such as current

revenues, revenues raised in prior years and held as capital reserves, current or prior years’ charges to property such as special assessments and impact fees, and grant revenues from the federal, state, or other governments.

7) Public‐private partnerships A contractual relationship between a local government and a private sector entity for

providing services or facilities to the general public.

8) Benefit principle The notion that individuals should pay for governmental services based on whether they benefit from the service. User fees are often used in local government to advance the benefit principle, aligning who pays to who receives.

9) Basis point One‐hundredth of 1 percent (one basis point is .01 of 1 percent).

10) Bond referendum The authorization of debt by the voters in a referendum. In most states, local government general

obligation bonds must be approved by the voters in a referendum.

11) Time value of money Because of the risk associated with the future, money today is worth more than the same amount of money in the future, and money in the near‐term future is worth more than the same amount in the far‐term future. Interest rates and interest‐rate formulas are used in capital finance to account for the time value of money and to convert cash flows occurring over time to a comparable basis of value.

Page 35

BondDescription

ActiveProjects

Revised

Budget

Actualto

Date

Available

Budget

%

Spent

ParksandRecreational

Greenw

ays,Land,ParkProjects

3,014,087

$

974,967

$

2,039,120

$

32.35%


RecreationCenter

8,897,287

$

694,793

$

8,202,494

$

7.81%

PublicSafetyandServicesFacilities

PoliceFacilityandTownHall

14,302,125

$

6,199,631

$

8,102,494

$

43.35%

Redevelopm

ent

LandAcquisition

2,043,951

$

1,082,720

$

961,231

$

52.97%

StreetandSidew

alk

LandAcquisition,Sidew

alk

Construction,USHighw

ay70

Improvem

ents,M

ontague,Purvis

andNew

RandConstruction,Jessup,

Benson/Garner

14,857,044

$

2,293,570

$

12,563,474

$

15.44%

Total

43,114,494

$

11,245,681

$

31,868,813

$

26.08%

BondIm

provem

entsCom

pleted‐May31,2016

Accomplishm

entsbyBondIssuance

AsofM

ay31st,2016


•GarnerR

ecreationCenter

contructionbidsreceivedin

May.

•Constructionhas

commencedonGarner's

secondDogParkatLake

BensonPark.Expectedto

becompletedinJune.

•Preferredalignm

entof

SouthGarnerGreenway

identified.

•Bidsreceivedfor

constructionofGPAC

parkinglot.Bidsinclude

resurfacingofexistingfront

parkingarea.

PublicSafetyandServices

Facilities

•Thenew

Tow

nHall's

(pictured)construction

commencedinMaywiththe

demolitionoftheoldTow

nHallsite.

•Withtheconclusionofthe

worktoim

provethesite's

stormwaterfacilities,the

Town'snew

PoliceStation

isnow

complete.

Redevelopm

ent

•TheTow

nreceivedbidsin

MayfortheRecreation

Center'sstormwater

facilitiesandroadway

improvem

entsalongUS

Hwy70andMontagueSt.

•Planningfortherelocation

ofUndergroundPow

er&

Utilitylinesindowntow

ncontinues.

StreetandSidewalk

•TheBenson/MainSt.

sidewalkprojectw

ork

aroundtherailroadbridge

hascom

menced.Projectis

expectedtobecompletedin

July.

•TimberD

rivesidewalk

projectw

ascom

pletedin

April.

•Right‐of‐w

ayacquisitionfor

theThom

psonRoad

sidewalkprojecthasbeen

completed.

•BuffaloRoadsidewalk

projectconstructionhas

commenced.

Garner Bond Status

Page 36

#ProjectNam

eBudget

Status

CompletionDate

CouncilNextSteps

1.1.bBuffaloeRoadSidew

alk

1,074,000

Delayed

TBD

AttendRibbonCutting

1.1d

Thom

psonRoadSidewalk

220,000

Delayed

Fall2016

AwardbidinFall2016

4Benson&MainStreetSidew

alks

652,791

On‐Track

Summer2016

AttendRibbonCutting

5.1

Greenw

ays

830,000

Delayed

TBD

DiscussfundingoptionsfollowingtheRecreation

Centerconstructionbidprocess

6.1

NeighborhoodImprovem

ents

750,000

On‐Track

Varies

Review

/Authorizethenextgroupofranked

project(s)

7.1

LandAcquisition(HistoricD

owntow

nGarnerPlan)

1,400,000

On‐Track

June2019

Continueconsiderationofpropertiesasnecessary

8.1

ParkEnhancements‐General

10,365

On‐Track

TBD

NA

8.1.cParkEnhancements‐MobileStage

108,438

On‐Track

Summer2016

SelectExteriorGraphics

8.1.eParkEnhancements‐DogPark(LakeBensonPark)

125,000

On‐Track

Summer2016

AttendRibbonCutting

9GarnerRecreationCenter

8,897,287

On‐Track

Winter2017

AwardConstructionBid

9.1.aUndergroundPoweratGarnerR

ecreationCenter

200,000

On‐Track

Winter2017


9.1.bDowntow

nStormwaterFacilities

600,000

On‐Track

Winter2017


9.1.cMontagueStreetIm

provem

ents

3,779,183

On‐Track

Winter2017


10TownHall

7,500,000

On‐Track

June2017

AttendRibbonCutting

11ParkingLotatGPAC

250,000

On‐Track

Winter2017


12GPACSidew

alkConnectionsandParkingIm

provem

ents

500,000

On‐Track

Winter2017


StatusIndicator

Green

Yellow

Red

On‐track–noissueslikelytoaffectprojectscope,scheduleorbudget.

Delayed‐knownissuesarelikelytoaffectprojectscope,scheduleand/orbudget.

Critical‐significantunresolvedissueswillim

pactproject,scheduleand/orbudget.

BondIm

provem

entsSum

mary

Garner Bond Status

Page 37

#ProjectNam

eProjectBudget

TotalSpent

Over/(Under)

Status

CompletionDate

1.1.a

ClaymoreDrive/Buckingham

Sidew

alk

220,000

149,007

(70,993)

Complete

Fall2014

1.1.c

TimberD

riveSidew

alk

220,000

TBD

TBD

Complete

Spring2016

2U.S.70Improvem

ents‐JessupDrive

375,000

350,300

(24,700)

Complete

Fall2014

3PoliceFacility

4,500,000

TBD

TBD

Complete

Spring2016

8.1.a

ParkEnhancements‐ConcessionsB

uildings

556,522

537,884

(18,638)

Complete

Fall2015

8.1b

ParkEnhancements‐DugoutCovers

108,148

108,148

0Complete

Spring2015

8.1d

ParkEnhancements‐DogPark(GarnerR

ec.Park)

75,000

47,324

(27,676)

Complete

Spring2015

8.1f

SouthGarnerParkFencing(Soccer)

16,703

16,703

0Complete

Spring2015

9.1.d

ROWAcquisitionforM

ontague/Purvis/N.RandImprovem

ents

1,116,000

TBD

TBD

Complete

Spring2016

15BondRelatedPropertyTaxIncrease

‐‐

‐Complete

June2015

AllCom

pletedProjects

6,071,373

1,209,366

(142,007)

CompletedProjectsSum

mary

Garner Bond Status

Page 38

1.1.a

1.ProjectName

Completed

BondImprovementsStatusReport

ClaymoreDrive/BuckinghamSidewalk

2.ProjectStatus Complete 3.TargetCompletionDate:

4.ProjectManager TonyChalk,TownEngineer

ProjectPlan

5.ProjectOverview

6.Milestones&MajorActivities(timeframe) TheClaymoreDrivesidewalkprojectiscomplete.

ProgressUpdate(UpdatedasofSeptember30,2015)

7.RecentProgress

ProjectcompletedinthefirstweekofOctober.Finalcostoftheprojectis$149,007whichisunderbudget.

The2010GarnerTransportationPlanprioritizesthevarioussidewalkneedsbasedonaccesstoparks,schools,downtownGarnerandconnectivitytoexistingsidewalks.Thislistwillberevisitedandreprioritizedtodeterminewhichsidewalkswillbefunded.

9.Statusexplanation(foryelloworred)

8.UpcomingWork

Garner Bond Status

Page 39

1.1.b

1.ProjectName

TBD

9.Statusexplanation(foryelloworred) CityofRaleighforcemainprojectcompletionwasdelayed.

ProgressUpdate(UpdatedasofJune14,2016)

7.RecentProgressNotificationshavebeensenttoallpropertyowner'snotifyingthemofthereasonsfortheprojectdelay.ContractorisremobilizingtotheprojectonMonday,June20,tostartinstallingstormdrainage.

8.UpcomingWorkContinueinstallationofthestormdrainagesystem.

5.ProjectOverview The2010GarnerTransportationPlanprioritizesthevarioussidewalkneedsbasedonaccesstoparks,schools,downtownGarnerandconnectivitytoexistingsidewalks.Thislistwillberevisitedandreprioritizedtodeterminewhichsidewalkswillbefunded.

6.Milestones&MajorActivities(timeframe)

Projecthasbeendelayedbyutilityconflicts.HavenegotiatedwithTimeWarnerCabletorelocatesectionofcableandmodifiedstreetcrosssectiontoavoidutilityconflicts.

BondImprovementsStatusReport

BuffaloeRoadSidewalk

2.ProjectStatus Delayed 3.TargetCompletionDate:

4.ProjectManager TonyChalk,TownEngineer

ProjectPlan

Garner Bond Status

Page 40

bryan.thompson

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Chatham County Fund Balance Model

Page 41

Assumptions:

1Orig

inal bud

geted revenu

es; 3% increase projected

ann

ually (n

o grow

th re

flected

for C

hatham

Park)

2Re

flects a

ddition

al re

venu

es neede

d for C

IP ope

ratin

g; assum

es prope

rty tax increase (o

ther CIP increases p

rojected

to be absorbed

by existing revenu

e)31+2

4Ba

sed on

Versio

n 40

B of deb

t mod

el; rep

resents fun

ds being

transferred in from

CIP re

serve to pay deb

t service on projects includ

ed in

the mod

el5Includ

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l reserve

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7Orig

inal bud

geted expe

nditu

res +

8 from

previou

s year; less 8‐12 of current year; 3%

increase projected

ann

ually

8Ad

ditio

nal expen

ditures resultin

g from

CIP projects (adde

d in su

bseq

uent year b

udgeted expe

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re [7

])9CIP projects fu

nded

by fund

balance app

ropriatio

n‐‐net of capita

l reserve fu

nding

10Gen

eral fu

nd capita

l outlay; 3% increase projected

ann

ually

11Scho

ol capita

l outlay; 3% increase projected

ann

ually

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nual deb

t service based

on curren

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deb

t plus p

rojected

deb

t in CIP

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tal of 7

‐12

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ut based

on Ve

rsion 40

B of deb

t mod

el15

Actual re

venu

es; assum

ed to

be 3%

abo

ve bud

geted revenu

es16

Assumes 7 and

8 sp

ent a

t 97%

; assum

es 9‐12 spen

t at 1

00%

1715

less 16

186 less 14

19Previous year's end

ing fund

balance

2017

+18

2119

+20

2215

less 3

2316

less 13

2421

divided

by (13+14

)25

Line

18 divide

d by

line

20

Chatham County Fund Balance Model

Page 42

NC Department of Commerce Loans and Grants (from website)

Community Development Block Grant, Economic Development Program https://edpnc.com/incentives/community-development-block-grant-program-economic-development/ The Community Development Block Grant, Economic Development Program (CDBG ED) is administered by the North Carolina Department of Commerce; it provides grants to local governments for public infrastructure development. Funds are administered based on an annual federal allocation to North Carolina from the U.S. Department of Housing and Urban Development (HUD) and are made available to most local governments for economic development projects. Companies cannot apply directly for this funding, but instead work collaboratively with a local government applicant. Under the authority of Title I of the U.S. Housing and Community Development Act of 1974 (as amended), the CDBG ED Program in North Carolina is designed to benefit low- and moderate-income persons through job creation. Funding eligibility is contingent upon the creation of permanent, full-time jobs meeting the following qualifying condition: at least 60% must be made available to persons whose household income over the previous 12 months was less than 80% of the median income for the area. For purposes of the CDBG ED Program, income eligibility is determined from data published annually for HUD’s Section 8 housing program. The N.C. Department of Commerce annually ranks the state’s 100 counties based on economic well-being and assigns each a tier designation. The 40 most distressed counties are designated as Tier 1, the next 40 as Tier 2 and the 20 least distressed as Tier 3. This tier system is incorporated into CDBG ED to encourage economic activity in the less prosperous areas of the state. For more information on county tier designations, visit our County Development Tier Designations page. CDBG ED awards are limited to $1 million per project to local governments located in Tier 1 and 2 counties and $750,000 to local governments located in Tier 3 counties. Awards for priority projects (primarily manufacturing) range from $10,000 to $15,000 per job. Awards for projects other than manufacturing range from $4,000 to $10,000 per job. The local government must provide at least one dollar for every three dollars provided by CDBG ED. The state’s 25 most economically distressed counties are not required to provide a local match. Eligible Use CDBG ED provides funding for the construction of public infrastructure to a site, in order to enable a company to locate or expand. Eligible uses include:

Upgrade or repair of public drinking water or wastewater treatment plants Upgrade, extension or repair of public water or sewer lines Extension of publicly owned natural gas lines (with an executed pipeline

construction, operating and resale agreement) Installation or extension of public broadband infrastructure

NC Department of Commerce

Page 43

Construction of publicly owned access roads not owned or funded by the North Carolina Department of Transportation

Construction of public rail spur improvements Basic Requirements for Eligibility All counties in North Carolina, except for Wake, Mecklenburg and Cumberland, and all municipalities, except for 24 entitlement communities, are eligible to apply for CDBG ED funding. Entitlement communities that receive CDBG ED Program funds directly from HUD are Asheville, Burlington, Cary, Chapel Hill, Charlotte, Concord, Durham, Fayetteville, Gastonia, Goldsboro, Greensboro, Greenville, Hickory, High Point, Jacksonville, Kannapolis, Lenoir, Morganton, New Bern, Raleigh, Rocky Mount, Salisbury, Wilmington and Winston-Salem. The town of Holly Springs in Wake County and the town of Linden in Cumberland County opted to participate in the statewide CDBG ED Program rather than that grant’s entitlement community program. For this reason, they receive funding through the statewide CDBG ED Program. CDBG ED funding will NOT be made available to projects that:

Assist companies that transfer jobs within the state or from another state, unless the company is expanding into the new area by adding a branch, affiliate or subsidiary while maintaining employment levels an existing facility. Jobs that are transferred from other facilities may not be counted toward the job-creation commitment;

Assist not-for-profit companies or organizations; Propose to assist companies that are in bankruptcy, or Assist sports teams, including motorsports.

In addition, any one of the following situations would render a company ineligible for CDBG ED funding, if it occurred prior to the grant award:

Execution of construction contracts; Placement of equipment purchase orders for the project site; Execution of a binding option for the purchase of an existing facility with a deposit

that is so large that the option constitutes a sales contract; Execution of sales contracts without a condition contingency for CDBG ED funding,

or the Public announcement of a project that includes no expression of the need for CDBG

ED participation, unless previously approved by CDBG ED staff. Contact For more information about the Community Development Block Grant Economic Development Program, contact the Economic Development Partnership of North Carolina at (919) 447-7744 or [email protected]. The Economic Development Partnership of North Carolina does not award or administer this incentive. All economic development incentives are awarded and administered by the North Carolina Department of Commerce.


Page 44

Utility Account https://edpnc.com/incentives/utility-account/ North Carolina’s Utility Account provides infrastructure grants to local governments in Tier 1 and Tier 2 counties. The North Carolina Department of Commerce administers the Utility Account. All applications are reviewed and approved by the Secretary of Commerce. Grant amounts depend on funding availability and each project’s relative merits. Grants are awarded to local governments for infrastructure improvements that are publicly owned and maintained. The applicant must demonstrate that the project is expected to lead to job creation in the near future. The grant amount depends on the number of new, full-time jobs created and cannot exceed $10,000 per job created or $500,000 per project. The N.C. Department of Commerce annually ranks the state’s 100 counties based on economic well-being and assigns each a tier designation. The 40 most distressed counties are designated as Tier 1, the next 40 as Tier 2 and the 20 least distressed as Tier 3. This tier system is incorporated into the Utility Account to encourage economic activity in the less prosperous areas of the state. For more information about county tier designations, visit our County Development Tier Designations page. Utility Account grants require a local match of at least one dollar for every three dollars awarded by the Utility Account. However, no local match is required in the state’s 25 most-distressed counties. Federal or state grant funds may not be used for the local match. Eligible Use The Utility Account provides funding for the construction of public infrastructure to a site in order to enable a company to locate or expand. Eligible uses include:

Upgrade or repair of public drinking water or wastewater treatment plants Upgrade, extension or repair of public water or sewer lines Extension of publicly owned natural gas lines (with an executed pipeline

construction, operating and resale agreement) Installation or extension of public broadband infrastructure Construction of publicly owned access roads not owned or funded by the North

Carolina Department of Transportation Construction of public rail spur improvements

Basic Requirements for Eligibility To be eligible for funding from the Utility Account, the Secretary of Commerce must determine:

The project is in a Tier 1 or Tier 2 county; Jobs created (in no more than three years) will have a measurable, favorable impact

on the project’s immediate location and will be commensurate with the size of the grant. The application must show the number and types of jobs to be created;

Applicant has demonstrated capability to operate the facility; Funding will not result in abandonment of an existing facility, except for

obsolescence, lack of labor or site limitations, and The proposed project will not have a significant adverse effect on the environment.


Page 45

Contact For more information about the Utility Account, contact the Economic Development Partnership of North Carolina at (919) 447-7744 or [email protected]. Rural Division, Economic Infrastructure Program Public Infrastructure https://edpnc.com/incentives/economic-infrastructure-program/ The Economic Infrastructure Program is administered by the Rural Division of the North Carolina Department of Commerce; it provides grants to local governments to assist with public infrastructure projects that will lead to the creation of new, full-time jobs. The N.C. Department of Commerce annually ranks the state’s 100 counties based on economic well-being and assigns each a tier designation. The 40 most distressed counties are designated as Tier 1, the next 40 as Tier 2 and the 20 least distressed as Tier 3. This tier system is incorporated into the Economic Infrastructure Program to encourage economic activity in the less prosperous areas of the state. For more information about county tier designations, visit our County Development Tier Designations page. Funding levels are based on the criteria below, as long as a sufficient number of jobs is committed to support the requested amount. Up to $12,500 per full-time job, maximum award of $500,000

Project is located in a Tier 1 or Tier 2 county; Company type is represented in the program’s Priority Industry Table; New jobs will meet the county wage standard, and The company will provide health insurance and pay at least 50% of the premiums for

participating employees. Up to $10,000 per full-time job, maximum award of $500,000

Project is located in a Tier 1 or Tier 2 county; Company type is NOT represented in the program’s Priority Industry Table; New jobs will meet the county wage standard, and The company will provide health insurance and pay at least 50% of the premiums for


Project is located in a Tier 1 or Tier 2 county; Company type is NOT represented in the program’s Priority Industry Table; New jobs will NOT meet the county wage standard, and The company will NOT provide health insurance and pay at least 50% of the premiums for


Project is located in a Tier 3 county; Company type is represented in the program’s Priority Industry Table; New jobs will meet the county wage standard, and The company will provide health insurance and pay at least 50% of the premiums for

participating employees.


Page 46

Eligible Use The Economic Infrastructure Program provides funding for the construction of public infrastructure to a site, in order to enable a company to locate or expand. Eligible uses include:

Upgrade or repair of public drinking water or wastewater treatment plants Upgrade, extension or repair of public water or sewer lines Extension of publicly owned natural gas lines (with an executed pipeline construction,

operating and resale agreement) Installation or extension of public broadband infrastructure Construction of publicly owned access roads not owned or funded by the North Carolina

Department of Transportation Construction of public rail spur improvements

Basic Requirements for Eligibility Eligible applicants are local governments in North Carolina. Priority is given to projects in a Tier 1 or Tier 2 county, or a rural census tract in a Tier 3 county. Contact For more information about the Economic Infrastructure Program, contact the Economic Development Partnership of North Carolina at (919) 447-7744 or [email protected]. Community Development Block Grant, Building Reuse Program Building Reuse https://edpnc.com/incentives/community-development-block-grant-building-reuse-program The Community Development Block Grant, Building Reuse Program (CDBG Building Reuse) is administered by the North Carolina Department of Commerce; it provides funds to renovate and upfit vacant industrial and commercial buildings for economic development purposes. CDBG Building Reuse grants are available to local government applicants that work in conjunction with a company intending to operate in a vacant building. The company’s new or expanding operations must result in the creation of permanent, full-time jobs. Under the authority of Title I of the U.S. Housing and Community Development Act of 1974 (as amended), the CDBG Building Reuse Program in North Carolina is designed to benefit low- and moderate-income persons through job creation. Funding eligibility is contingent upon the creation of permanent, full-time jobs meeting the following qualifying condition: at least 60% must be made available to persons whose household income over the previous 12 months was less than 80% of the median income for the area. For purposes of the CDBG Building Reuse Program, income eligibility is determined from data published annually for the Section 8 housing program of the U.S. Department of Housing and Urban Development (HUD). A CDBG Building Reuse award is limited to $750,000 per local government. The grant amount cannot exceed $20,000 per job for priority projects (primarily manufacturing) and $12,000 per job for all other projects. The local government must provide at least one dollar for every dollar provided by CDBG Building Reuse. Matching funds may come from the building owner or from the project company.


Page 47

CDBG Building Reuse and the Rural Division, Building Reuse Program may be combined to support a maximum of 50% of renovation costs. Each program must be able to identify separate jobs to be created. When the Rural Division, Building Reuse Program and CDBG Building Reuse funds are used in the same project, CDBG Building Reuse maximum funding for the latter is $10,000 per job for priority projects and $6,000 for other projects. Eligible Use Eligible expenses incurred after a grant has been awarded include: materials and labor to install HVAC, electrical, plumbing, fire alarm/suppression system, roofing, flooring, carpentry, drywall, paint and other renovation or upfitting costs. Prohibited costs that may not be submitted for reimbursement or to meet the matching funds requirement include: building purchase, architectural costs, engineering costs, permit fees, surveys, legal fees, machinery and equipment, telephone hardware and software, computer hardware and software, furnishings, paving, fencing, kitchen equipment and refrigeration equipment. Basic Requirements for Eligibility CDBG Building Reuse projects must involve specific CDBG Building Reuse-eligible activities that will create or retain private-sector full-time jobs. All counties in North Carolina, except for Wake, Mecklenburg and Cumberland, and all municipalities except for 24 entitlement communities, are eligible to apply for CDBG Building Reuse funding. Entitlement communities that receive CDBG Building Reuse Program funds directly from HUD are Asheville, Burlington, Cary, Chapel Hill, Charlotte, Concord, Durham, Fayetteville, Gastonia, Goldsboro, Greensboro, Greenville, Hickory, High Point, Jacksonville, Kannapolis, Lenoir, Morganton, New Bern, Raleigh, Rocky Mount, Salisbury, Wilmington and Winston-Salem. The town of Holly Springs in Wake County and the town of Linden in Cumberland County opted to participate in the statewide CDBG Building Reuse Program rather than that grant’s entitlement community program. For this reason, they receive funding through the statewide CDBG Building Reuse Program. To be eligible, documentation must be provided showing the building has been vacant 30 consecutive days or more prior to the date of the pre-application conference. Contact For more information about the Community Development Block Grant Building Reuse Program, contact the Economic Development Partnership of North Carolina at (919) 447-7744 or [email protected].


Page 48

Rural Division, Building Reuse Program Building Reuse https://edpnc.com/incentives/building-reuse-program The Building Reuse Program is administered by the Rural Division of the North Carolina Department of Commerce; it provides grants to local governments for two purposes: the renovation of vacant buildings and the renovation or expansion of a building occupied by an existing North Carolina company wishing to expand in its current location. The N.C. Department of Commerce annually ranks the state’s 100 counties based on economic well-being and assigns each a tier designation. The 40 most distressed counties are designated as Tier 1, the next 40 as Tier 2 and the 20 least distressed as Tier 3. This tier system is incorporated into the Building Reuse Program to encourage economic activity in the less prosperous areas of the state. For more information on county tier designations, visit our County Development Tier Designations page. Vacant Building Grants are available to support vacant building renovation. A speculative building that has never been occupied is not eligible unless it is at least five years old. Eligible buildings must have been vacant for at least three months prior to the application deadline. Funding levels for projects are outlined below: Up to $12,500 per full-time job, maximum award of $500,000

Project is located in a Tier 1 or Tier 2 county; Company type is represented in the program’s Priority Industry Table; New jobs will meet the county wage standard, and The company will provide health insurance and pay at least 50% of the premiums for


Project is located in a Tier 1 or Tier 2 county; Company type is NOT represented in the program’s Priority Industry Table; New jobs will meet the county wage standard, and The company will provide health insurance and pay at least 50% of the premiums for


Project is located in a Tier 1 or Tier 2 county; Company type is NOT represented in the program’s Priority Industry Table; New jobs will NOT meet the county wage standard, and The company will NOT provide health insurance and pay at least 50% of the

premiums for participating employees. Existing Building Grants are available to support the renovation or expansion of buildings occupied by a company operating in North Carolina for at least 12 months.


Page 49

Up to $10,000 per full-time job, maximum award of $500,000 Project is located in a Tier 1 or Tier 2 county; Company type is represented in the program’s Priority Industry Table; New jobs will meet the county wage standard, and The company will provide health insurance and pay at least 50% of the premiums for

participating employees. Eligible Use Eligible expenses incurred after a grant has been awarded include: materials and labor to install HVAC, electrical, plumbing, fire alarm/suppression system, roofing, flooring, carpentry, drywall, paint and other renovation or upfitting costs. Prohibited costs that may not be submitted for reimbursement or to meet the matching funds requirement include: building purchase, architectural costs, engineering costs, permit fees, surveys, legal fees, machinery and equipment, telephone hardware and software, computer hardware and software, furnishings, paving, fencing, kitchen equipment and refrigeration equipment. Basic Requirements for Eligibility Eligible applicants are local governments located in a Tier 1 or Tier 2 county. In Tier 1 or Tier 2 counties, priority will be given to towns or communities with populations of fewer than 5,000. The local government must contribute at least 5% of the total eligible expenditures. The cash match must come from local government resources and may not be derived from other state or federal grant funds. Contact For more information about the Building Reuse Program, contact the Economic Development Partnership of North Carolina at (919) 447-7744 or [email protected]. Rural Building Demolition Program http://www.nccommerce.com/ruraldevelopment/rural-grants-programs/building-demolition *Guidelines and Application are subject to change at the discretion of the Rural Infrastructure Authority The Demolition Grant Program under the Rural Grants/Programs Section of the North Carolina Department of Commerce will provide grants to local governments to support the demolition of a vacant building to encourage site rehabilitation and site availability for economic development purposes. Eligible applicants are units of local government located in either a Tier 1 or Tier 2 county, or a rural census tract in a Tier 3 county. The tier designations can be found on the NC Department of Commerce website at http://www.nccommerce.com/research-publications/incentive-reports/county-tier-designations. In Tier 1 or Tier 2 counties, priority will be given to towns or communities with populations less than 5,000.


Page 50

As prescribed in N.C.G.S. 143B-472.127(a)(2) a rural census tract is an area having a population density of less than 500 people per square mile according to the most recent decennial federal census. The rural census tract designations can be found at http://accessnc.commerce.state.nc.us/gis/web_development/rural_development.html. Funding Availability: • Up to $75,000 for buildings 100,000 square feet or less • Up to $150,000 for buildings over 100,000 square feet • Building located in Tier 1, Tier 2, or rural census tract of a Tier 3 county

Eligibility: • The unit of local government (“applicant”) must pass a Resolution approving the

demolition. If multiple political jurisdiction tax the property or building, all of the jurisdictions must pass a Resolution approving the demolition.

• The building must be vacant for three years prior to the proposed demolition. • The unit of local government must have control of the property at the time of grant award,

either through a contractual arrangement or ownership. • The local government must contribute at least 25% of the total project cost as a cash match.

The cash match shall come from local resources and may not be derived from other State or federal grant funds. If awarded funds towards the demolition project, certain pre-development costs may be counted towards the local match requirement up to one year prior to the award date of the grant.

• There must be a reasonable expectation of private sector investment locating on the site. Properties having residential zoning are not eligible for this grant. The proposed property must be zoned for non-residential purposes for a minimum of five (5) years after the award of the grant

• The only eligible expense is building demolition and removal. • Pre-development costs are not eligible for payment from the grant. • Upon completion of the project the property must be site ready for development. • The site shall not be used for locating public facilities, including parking lots, parks or

recreational facilities. • The unit of local government receiving funds under this grant program shall comply with

Chapter 143, Article 8 of the N.C. General Statutes, and any other applicable state regulations regarding procurement. Local governments are cautioned that funds received for the project from other sources may have additional procurement regulations that also must be followed. Grantees are encouraged to consult with their attorney to ensure compliance with all applicable regulations that govern procurement for the proposed project.

• The unit of local government receiving funds under this grant program shall comply with all federal, state, and local laws, rules, regulations, and ordinances applicable to the project and to the grants pertaining thereto, including (without limitation), requirements relating to procurement, environmental standards and permitting standards where applicable. Grantees are encouraged to consult with their attorney to ensure compliance with all applicable demolition requirements.

• Local government recipients will be subject to state audit and reporting requirements.


Page 51

Application Deadlines and Submittal Requirements: The completed application must be received by 5:00 p.m. on the deadline date.

Full Application Deadlines Date of Award

September 20, 2016 October 20, 2016

November 1, 2016 December 15, 2016

January 3, 2017 February 16, 2017

March 20, 2017 April 20, 2017

May 2, 2017 June 22, 2017

Contact Information: Melody Adams Director, Rural Grant Programs Rural Economic Development Division NC Department of Commerce 919-814-4661 (Office) [email protected] Mailing Address: 4346 Mail Service Center Raleigh, NC 27699-4346 Physical Address: 301 North Wilmington Street Raleigh, NC 27601


Page 52

NC Department of Environmental Quality Loans and Grants (from website)

Clean Water State Revolving Fund http://portal.ncdenr.org/web/wi/cwsrf Overview

• The Clean Water Fund has been capitalized for 20 years and can fund individual projects up to $30 million.

• The Clean Water State Revolving Fund (CWSRF) Program was created by the 1987 amendments to the Federal Clean Water Act.

• Congress provides funds for states to establish revolving loan programs for funding of wastewater treatment facilities and projects associated with estuary and nonpoint source programs.

• States provide 20% matching funds. Types of Funding Available

• Low-interest loans (1/2 of market interest rates) • Limited amount of principal forgiveness loans • 0% interest loans available for Green Projects and for rehabilitation projects for certain

local government units Eligible Applicants

• Local Government Units (counties, cities, towns, sanitary districts, etc.) Eligible Projects

• Wastewater treatment • Wastewater collection • Reclaimed water • Stormwater BMPs

• Stream restoration • Energy efficiency at treatment works

or collection systems

Key Program Requirements

• Loan maximum is ½ the amount available per funding cycle. • Construction must start within 24 months of Letter of Intent to Fund. • Closing fee of 2% (which cannot be financed). • Local Government Commission (LGC) must approve all loans.

Applications

• The CWSRF Program has two funding cycles per year, typically in March and September.

• Refer to Funding Program Application Information for detailed information on application deadlines and requirements.

• Contact Anita E. Reed, PE at (919) 707-9174 or via email at [email protected] with application questions.

NC Department of Environmental Quality

Page 53

Drinking Water State Revolving Fund http://portal.ncdenr.org/web/wi/dwsrf Overview

• The Drinking Water State Revolving Fund was created with the 1996 amendments to the Safe Drinking Water Act.

• Because the DWSRF is federally-seeded, the loans are subject to additional federal regulations regarding environmental review, outreach for disadvantaged business enterprises, payroll (Davis Bacon and related Acts), etc.

• Congress provides funds for states to establish revolving loan programs for funding of drinking water projects.

• States provide 20% matching funds. Types of Funding Available

• Low-interest loans (1/2 of market interest rates) • Limited amount of principal forgiveness loans

Eligible Applicants

• Local Government Units (counties, cities, towns, sanitary districts, etc.) • Non-profit Water Corporations • Investor-Owned Drinking Water Corporations

Eligible Projects

• Source, treatment, storage, or transmission & distribution systems Key Program Requirements

• Loan maximum is ½ the amount available per funding cycle. • Construction must start within 24 months of Letter of Intent to Fund. • Closing fee of 2% (which cannot be financed). • Local Government Commission (LGC) must approve all loans.

Applications

• The DWSRF Program has one funding cycle per year, typically in September. • Refer to Funding Program Application Information for detailed information on

application deadlines and requirements. • Contact Vincent Tomaino, PE at (919) 707-9058 or via email at

[email protected] with application questions. Community Development Block Grant-Infrastructure http://portal.ncdenr.org/web/wi/cdbg-i Overview

• In 2013, the North Carolina General Assembly allocated Community Development Block Grant funds to the Infrastructure program and transferred funds to the Division of Water Infrastructure to administer.


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• The purpose of these funds is to construct public water and sewer infrastructure to mitigate public and environmental health problems in areas where the percentage of low to moderate income persons is at least 51 percent.

• Community Development Block Grants for other for other types of projects are available through the North Carolina Department of Commerce.

Types of Funding Available

• Grants Eligible Applicants

• Non-entitlement units of General Local Government, excluding water/sewer districts and other single purpose government units

Eligible Projects

• Drinking water and wastewater infrastructure projects in areas that meet the HUD Low and Moderate income (LMI) threshold.


• Maximum award is $2 million over a 3-year period. • Local governments may submit multiple applications but will only be awarded funding

for one project in each funding round. Applications

• The CDBG-Infrastructure Program has one funding cycle per year, typically in September.

• Refer to Funding Program Application Information for detailed information on application deadlines and requirements.

• Contact Julie Haigler Cubeta at (919) 707-9189 or via email at [email protected] with application questions.

State Wastewater and Drinking Water Reserve Programs http://portal.ncdenr.org/web/wi/state-programs Overview The State Wastewater Reserve and Drinking Water Reserve Programs provide grants and loans for planning, design and construction of critical water infrastructure. Grant dollars are awarded according to affordability criteria developed based on the definition found in NCGS 159G-20.(1). The purpose of the affordability criteria is to stretch limited grant dollars further by targeting applicants who demonstrate the most need and can least afford the project. The criteria is used for (1) determining eligibility for grant funding and (2) determining the percentage of the project that would be funded by grants. Affordability criteria guidance can be found on the Application Forms & Resources page of the Division's website. Types of Funding Available

• Grants • Loans


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Eligible Applicants

• Local Government Units • Only available to the extent that other funding sources are not reasonably available to the

applicant. Eligible Projects

• Wastewater collection systems and treatment works • Public water system projects


• The amount of grants for each system awarded for three consecutive fiscal years may not exceed $3 million.

• The amount of targeted interest loans for each system awarded for three consecutive fiscal years may not exceed $3 million.

Questions

• For wastewater projects, contact Anita E. Reed, PE at (919) 707-9174 or via email at [email protected]

• For drinking water projects, contact Vincent Tomaino, PE at (919) 707-9058 or via email at [email protected]


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What does this program do?This program provides affordable funding to develop essential community facilities in rural areas. An essential community facility is defined as a facility that provides an essential service to the local community for the orderly development of the community in a primarily rural area, and does not include private, commercial or business undertakings.

Who may apply for this program?Eligible borrowers include:• Public bodies

Community Facilities Direct Loan & Grant

What is an eligible area?Rural areas including cities, villages, townships and towns including Federally Recognized Tribal Lands with no more than 20,000 residents according to the latest U.S. Census Data are eligible for this program.

How may funds be used?Funds can be used to purchase, construct, and/or improve essential community facilities, purchase equipment and pay related project expenses.

Examples of essential community facilities include:

• Healthcare facilities such as hospitals, medical clinics, dental clinics, nursing homes or assisted living facilities

• Public facilities such as town halls, courthouses, airport hangars or street improvements

• Community support services such as child care centers, community centers, fairgrounds or transitional housing

• Public safety services such as fire departments, police stations, prisons, police vehicles, fire trucks, public works vehicles or equipment

• Educational services such as museums, libraries or private schools

• Utility services such as telemedicine or distance learning equipment

• Local food systems such as community gardens, food pantries, community kitchens, food banks, food hubs or greenhouses

For a complete list see Code of Federal Regulations 7 CFR, Part 1942.17(d) for loans; 7 CFR, Part 3570.62 for grants.

• Community-based nonprofit corporations • Federally recognized Tribes

What kinds of funding are available?• Low interest direct loans

• Grants

• A combination of the two above, as well as our loan guarantee program. These may be combined with commercial financing to finance one project if all eligibility and feasibility requirements are met.

What are the funding priorities?Priority point system based on population, median household income

• Small communities with a population of 5,500 or less

• Low-income communities having a median household income below 80% of the state nonmetropolitan median household income.

What are the terms?Funding is provided through a competitive process.

Direct Loan:

• Loan repayment terms may not be longer than the useful life of the facility, state statutes, the applicants authority, or a maximum of 40 years, whichever is less.

• Interest rates are set by Rural Development, contact us for details and current rates.

• Once the loan is approved, the interest rate is fixed for the entire term of the loan, and is determined by the median household income of the service area.

• There are no pre-payment penalties.

• Contact us for details and current interest rates applicable for your project. Page 57

http://www.census.gov

http://www.census.gov

http://www.ecfr.gov/cgi-bin/text-idx?SID=dc79cb034816aebec887eb1b64c8cce7&node=pt7.15.3570&rgn=div5

http://www.rd.usda.gov/programs-services/community-facilities-guaranteed-loan-program

http://www.rd.usda.gov/programs-services/community-facilities-guaranteed-loan-program

Add contact information

Community Facilities Direct Loan & Grant

NOTE: Because citations and other information may be subject to change please always consult the program instructions listed in the section above titled “What Law Governs this Program?” You may also contact your local office for assistance. You will find additional forms, resources, and program information at www.rd.usda.gov. USDA is an equal opportunity provider, employer, and lender.

Last Updated February 2015

What are the terms? (continued)Grant Approval:

Grant funds must be available. Applicant must be eligible for grant assistance, which is provided on a graduated scale with smaller communities with the lowest median household income being eligible for projects with a higher proportion of grant funds. Grant assistance is limited to the following percentages of eligible project costs:

Maximum of 75 percent when the proposed project is:

• Located in a rural community having a population of 5,000 or fewer; and

• The median household income of the proposed service area is below the higher of the poverty line or 60 percent of the State nonmetropolitan median household income.









• The median household income of the proposed service area is below the higher of the poverty line or 90 percent of the State nonmetropolitan median household income. The proposed project must meet both percentage criteria. Grants are further limited.

Are there additional requirements?• Applicants must have legal authority to borrow money,

obtain security, repay loans, construct, operate, and maintain the proposed facilities

• Applicants must be unable to finance the project from their own resources and/or through commercial credit at reasonable rates and terms

• Facilities must serve rural area where they are/will be located

• Project must demonstrate substantial community support

• Environmental review must be completed/acceptable

How do we get started?Contact your local offices to discuss your specific project. Applications are accepted year round

Who can answer questions?Contact our local office that serves your area.

What governs this program?• Direct Loan: 7 CFR Part 1942, Subpart A

• Grant: 7 CFR Part 3570, Subpart A

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http://www.rd.usda.gov/contact-us/state-offices

http://www.rd.usda.gov/programs-services/delta-health-care-services-grants



USDA Grants (from USDA website) Water & Environmental Programs http://www.rd.usda.gov/programs-services/all-programs/water-environmental-programs To apply for Water & Environmental Grant and Loan funding, visit RD Apply, our newly developed, online application system Through Rural Utilities Service Water and Environmental Programs (WEP), rural communities obtain the technical assistance and financing necessary to develop drinking water and waste disposal systems. Safe drinking water and sanitary waste disposal systems are vital not only to public health, but also to the economic vitality of rural America. Rural Development is a leader in helping rural America improve the quality of life and increase the economic opportunities for rural people. WEP provides funding for the construction of water and waste facilities in rural communities and is proud to be the only Federal program exclusively focused on rural water and waste infrastructure needs of rural communities with populations of 10,000 or less. WEP also provides funding to organizations that provide technical assistance and training to rural communities in relation to their water and waste activities. WEP is administered through National Office staff in Washington, DC, and a network of field staff in each State. Historically Low Interest Rates USDA Rural Development Water and Environmental Programs: • Circuit Rider Program • Emergency Community Water Assistance Grants • Grants for Rural and Native Alaskan Villages • Household Water Well System Grants • Individual Water & Wastewater Grants • SEARCH - Special Evaluation Assistance for Rural Communities and Households • Solid Waste Management Grants • Water & Waste Disposal Grants to Alleviate Health Risks on Tribal Lands and Colonias • Water & Waste Disposal Loans & Grants • Water & Waste Disposal Loan Guarantees • Water & Waste Disposal Predevelopment Planning Grants • Water & Waste Disposal Revolving Loan Funds • Water & Waste Disposal Technical Assistance & Training Grants Economic Impact Initiative Grants http://www.rd.usda.gov/programs-services/economic-impact-initiative-grants

USDA Grants--Other

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What does this program do? This program provides funding to assist in the development of essential community facilities in rural communities with extreme unemployment and severe economic depression. An essential community facility is one that provides an essential service to the local community, is needed for the orderly development of the community, serves a primarily rural area, and does not include private, commercial or business undertakings. Who may apply for this program? • Public bodies • Non-profits • Federally-recognized Tribes ι What is an eligible area? • Rural areas including; cities, villages, townships, towns and federally-recognized Tribal

Lands ι, with no more than 20,000 residents that have a “Not Employed Rate”ι greater than 19.5%

• The median household income of a community being served must be below 90% of the state non-metropolitan median household income for grant eligibility

• Grant assistance is based on a graduated scale determined by population, median household income, total project costs and financial need

How may funds be used? To construct, enlarge or improve community facilities for health care, public safety and public service. Grants may be made in combination with other financial assistance such as a Community Facilities direct or guaranteed loan, applicant contribution or funding from other sources. Examples of essential community facilities include: • Health Care: hospitals, medical clinics, dental clinics, nursing homes, assisted-living

facilities • Public Facilities: city/town/village halls, courthouses, airport hangers, street improvements • Community Support Services: child care centers, community centers, fairgrounds,

transitional housing • Public Safety: fire halls, police stations, prisons, jails, police vehicles, fire trucks, public

works vehicles and equipment • Educational: museums, libraries, private schools • Utility: telemedicine, distance learning • Local Food Systems: community gardens, food pantries, community kitchens, food banks,

food hubs, greenhouses, kitchen appliances • For a complete list, see Code of Federal Regulations (CFR) 3570.7 What kind of funding is available? • Grants up to 75% of eligible project cost based on need and funding availability • Applicant must be eligible for grant assistance, which is determined by the population and

median household income of the service area • Grant funds must be available

USDA Grants--Other

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Are there additional requirements? • Applicants must be unable to finance the project from their own resources and/or through

commercial credit at reasonable rates and terms • Facilities must serve the rural area where they are/will be located • Projects must demonstrate substantial community support • Environmental review must be completed and determined to be acceptable • Priorities are given to projects related to public health and safety, energy efficiency and

education How do we get started? • Contact your local office to discuss your specific project • Applications for this program are accepted through your local office year round • Program resources are available online (includes forms, guidance and certifications) Who can answer questions? Contact your local office. NOTE: Because citations and other information may be subject to change, please always consult the program instructions listed in the section above titled "What Law Governs this Program?" You may also contact your local office for assistance. Rural Community Development Initiative Grants http://www.rd.usda.gov/programs-services/rural-community-development-initiative-grants What does this program do? This program provides funding to help non-profit housing and community development organizations support housing, community facilities, and community and economic development projects in rural areas. Announcement of recent RCDI Grant Awards and the list of recipients. Who may apply for this program? • Public bodies • Non-profit organizations • Federally Recognized Tribes ι What is an eligible area? Rural and rural area--Any area other than (i) a city or town that has a population of greater than 50,000 inhabitants; and (ii) the urbanized area contiguous and adjacent to such city or town. ι. How may funds be used? To improve housing, community facilities, and community and economic development projects in rural areas. Rural Community Development Initiative grants may be used for, but are not limited to: • Training sub-grantees to conduct:

USDA Grants--Other

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1. Home-ownership education 2. Minority business entrepreneur education

• Providing technical assistance to sub-grantees on 3. Strategic plan development 4. Accessing alternative funding sources 5. Board training 6. Developing successful child care facilities 7. Creating training tools, such as videos, workbooks, and reference guides 8. Effective fundraising techniques

What kind of funding is available? • Minimum grant award is $50,000; maximum grant award is $250,000 • Grant funds are limited and are awarded through a competitive process Are matching funds required? • Matching fund requirement equal to amount of grant • In-kind contributions cannot be used as matching funds • Partnerships with other federal, state, local, private and nonprofit entities are encouraged How do we get started? • Applications are accepted on an annual basis through a Notice of Funding Availability

(NOFA) in the Federal Register • Program Resources are available online (includes forms needed, guidance, certifications etc.) Who can answer questions? Contact your local RD office. What governs this program? Code of Federal Regulation; 2 CFR 200 and Guidelines announced in NOFA, published in the Federal Register. NOTE: Because citations and other information may be subject to change please always consult the program Instructions listed in the section above titled "What Law Governs this Program?" You may also contact your State Office RCDI Contact for assistance. Housing http://www.rd.usda.gov/programs-services/all-programs/multi-family-housing-programs Multi-Family Housing Programs We provide affordable multi-family rental housing in rural areas by financing projects geared for low-income, elderly and disabled individuals and families as well as domestic farm laborers. We extend our reach by guaranteeing loans for affordable rental housing designed for low to moderate-income residents in rural areas and towns. We preserve our portfolio of some 14,000 properties by aggressively restructuring loans for existing rural rental housing and off-farm labor housing projects to allow for sufficient reserves

USDA Grants--Other

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to meet major repairs and improvements over the lifetime of the property. On a yearly basis we provide grants to sponsoring organizations to repair or rehabilitate housing for needy families. We also subsidize rents for low-income tenants in our projects who cannot afford to pay their full rent. If you are interested in applying for funding under one of our programs, check out the links below. Rural Development Multi-Family Housing Programs: • Farm Labor Direct Loans & Grants • Housing Preservation & Revitalization Demonstration Loans & Grants • Housing Preservation Grants • Multi-Family Housing Direct Loans • Multi-Family Housing Loan Guarantees • Multi-Family Housing Rental Assistance Single Family Housing Programs Well built, affordable housing is essential to the vitality of communities in rural America. Housing Programs give families and individuals the opportunity to buy, build, repair, or own safe and affordable homes located in rural America. Eligibility for these loans, loan guarantees, and grants is based on income and varies according to the average median income for each area. Homeownership Programs Low interest, fixed-rate Homeownership loans are provided to qualified persons directly by USDA Rural Development. Financing is also offered at fixed-rates and terms through a loan from a private financial institution and guaranteed by USDA Rural Development for qualified persons. Neither one of these home loan programs require a down payment. USDA Rural Development also offers competitive grants to public and private non-profit Self-Help Housing organizations and Federally Recognized Tribes to enable hardworking families to build their own homes. Rural Development Single Family Housing Programs: • Single Family Housing Direct Home Loans • Single Family Housing Home Loan Guarantees • Mutual Self-Help Housing Technical Assistance Grants • Rural Housing Site Loans Home Repair Loans and Grants provide funds to elderly and very-low-income homeowners to remove health and safety hazards, perform necessary repairs, improve or modernize a home, make homes accessible for people with disabilities, or make homes more energy efficient so these very-low-income families use less of their income on utility bills. Learn all about our Home Repair Programs in this one-minute video:

USDA Grants--Other

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Glossary

Selected Terms for Elected Officials from: Justin Marlow, William C. Rivenbark, and A. John Vogt. 2009. Capital Budgeting and Finance: A Guide for Local Governments, 2nd edition. Washington, DC: ICMA.

(Thanks to SOG’s Bill Rivenbark for sharing this information for use in this class.) Ad valorem tax Tax levied on the value of property, which also is generally called a property tax. General

obligation bonds issued by most local governments are secured by unlimited property tax–levying authority. See also general obligation bond

Amortization Allocation of a capital investment or cost over a period of years or time corresponding to the

investment’s term or useful life, or allocation of debt over the debt’s term. Appropriation Authority to spend, which is provided by a budget ordinance or resolution. In the operating

budget, the authority lasts for only one year or another specific period and ends at the end of that year or period. An appropriation in a project ordinance normally provides spending authority that lasts for the length of time it takes to complete the project. See also budget

Basis point One‐hundredth of 1 percent (one basis point is .01 of 1 percent). Benefit principle The notion that individuals should pay for governmental services on whether or not they

actually benefit from the service. User fees are often used in local government to advance the benefit principle, aligning who pays to who receives.

Bond A written promise to repay debt on a specific date in the future, along with payment of a specified

amount of interest at predetermined intervals while the debt is outstanding. “Certificate,” “warrant,” and “note” are other names that refer to what is defined here as a bond. “Bond” usually refers to long‐term debt, that is, debt outstanding for thirteen months or longer; “note” commonly refers to short‐term debt, which matures in a period of twelve months or less.

Bond order Act of a jurisdiction’s governing body authorizing the issuance of debt. For general obligation

bonds and certain other types of debt in many local jurisdictions, the bond order also must be approved by the voters in a bond referendum.

Bond rating Assessment of the credit quality of particular debt. A bond rating evaluates the willingness and

ability of the issuer to repay the debt with periodic interest when due and to meet other obligations under the bond contract.

Bond rating agency An agency that evaluates and rates debt. Three national agencies rate local government

debt in the United States: Standard & Poor’s Corporation, Moody’s Investors Service, and Fitch/IBCA. They rate local government bonds or debt at the request of the issuer, and the issuer pays for the ratings.

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Bond referendum The authorization of debt by the voters in a referendum. In most states, local government general obligation bonds must be approved by the voters in a referendum.

Budget A plan for acquiring revenues and making expenditures in order to provide services, achieve

objectives, buy items, and/or carry out projects. Budgets generally balance or should balance revenues and spending. The legally enacted budgets make revenues available for spending and/or provide author‐ity to spend. The legal budget also may levy taxes and raise other revenues. Most budgets are for a fixed term—usually one year. Some budgets have project lives, providing spending authority for the length of time it takes to complete a project. See also operating budget

Capital asset Property that has an initial useful life longer than one year and that is of significant value. The

useful life of most capital assets extends well beyond one year. “Significant value” is defined by an organization’s capitalization policy. For most local governments, significant value is $5,000 or above. See also infrastructure

Capital budget A budget that identifies and balances revenues or other financial resources and spending for

the acquisition or construction of major capital projects or assets. The recommended capital budget often originates from the first year of a multiyear capital improvement program. It may be presented in the operating budget document or in a separate document for the capital budget. Legal appropriation of money for capital projects may occur in the operating budget ordinance or in one or more capital project ordinances or resolutions. See also capital asset; operating budget

Capital budgeting The process and methods used in preparing and enacting the capital budget. Capital

budgeting typically involves the raising and spending of large sums of money and results in the acquisi‐tion or construction of long‐lived and expensive capital assets. It includes multiyear capital improvement programming and financial forecasting; the translation of capital and financial plans and financial forecasts into capital budgets; capital financing sources and strategies; and capital project authorization, appropriation, and implementation. See also capital asset; capital budget

Capital financing Money that is raised and spent to build or acquire a capital asset. Capital financing can

include the proceeds of different types of debt: general obligation bonds, revenue bonds, certificates of participation or capital lease debt, and some forms of special or limited obligation bonds. Capital financing also can include annually levied taxes or revenues, capital reserves, impact fees and other charges to property, grants, and other sources that are allocated and spent to help build and acquire capital assets.

Capital improvement program (CIP) A multiyear forecast of major capital building, infrastructure, and

equipment needs. The forecast period is often five years, although some CIPs cover shorter or longer periods. The CIP not only identifies future capital needs but also the capital appropriations or estimated spending required to make those needs a reality, sources of capital financing, and their impact on future operating budgets. The CIP is essentially a plan with its first year often becoming the capital budget for the year. See also capital budget

Capital lease Lease classification of the Governmental Accounting Standards Board (GASB); in this book,

also designates a lease that is used for capital financing purposes. Under GASB rules, a capital lease is one that meets one of four conditions: (1) it transfers ownership of the leased property to the lessee; (2) the lease contains a bargain or nominal purchase option; (3) the lease covers 75 percent or more of the estimated economic or useful life of the leased property; and (4) the present value of the lease payments

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equals or exceeds 90 percent of the fair value of the leased property at the lease’s inception. Local government installment or lease purchase financings and certificates of participation are capital leases. See also certificate of participation; installment‐purchase financing

Capital projects fund A governmental fund established to account for financial resources to acquire or

construct large capital facilities or assets, other than those accounted for in enterprise funds. Capital reserve Money raised and set aside to finance future capital projects or acquisitions. Capital reserves

are essentially savings accounts. They can take various forms: a designation or reserving of general or other operating fund balances, a separate capital reserve fund, an equipment replacement or infrastructure rehabilitation revolving fund.

Certificate of participation (COP) Shares in a debt obligation created by a capital lease (installment‐ or lease‐

purchase contract) that are sold to or placed with investors. COPs are typically used for capital leases for large projects where the financing exceeds $10 million—see bank qualified debt for additional information on the $10 million. The certificates are secured by the property financed with the debt and are actually sold by an on‐behalf‐of entity that acts for the state and local government in issuing the debt. That entity serves as the lessor, and the governmental unit acts as the lessee in the transaction. See also capital lease; installment‐purchase financing; private placement

Change order An official change to a construction contract that normally changes the scope of work. It is

common to have specific language in contracts that govern the change order process. Cost‐benefit analysis An approach to evaluating capital projects and acquisitions that identifies and

compares the net present value of benefits with the net present value of costs. Debt Money or other property lent or borrowed and that must be repaid or returned. Debt may be

outstanding for a short term (one year or less) or for a long term (one year or more). The debtor is charged interest while debt is outstanding. The interest on most debt that local governments issue for capital financing purposes is paid each year while the debt is outstanding. The interest on some other debt accrues each year or periodically within the year but is not paid until the end of the debt’s term. The accrued interest in one period is added to the debt’s principal, and interest in the next period is charged on the principal plus any accrued plus unpaid interest.

Debt capacity The capacity of a local government or a particular local utility or enterprise to pay principal

and interest on debt as well as meet other needs and commitments. General or “net” debt capacity for a local government is evaluated with a variety of debt ratios: net debt per capita, net debt as a percentage of taxable valuation, net debt as a percentage of personal income, and annual debt service on net debt as a percentage of general fund and related expenditures. The debt capacity of a utility or enterprise is evaluated in terms of coverage as well as other factors.

Debt financing Money obtained by incurring debt and used to build or acquire capital assets or for other

purposes. Debt financing for local government capital projects comes mainly from the issuance of long‐term bonds or other debt. Debt financing is one of two general approaches to capital financing; the other approach is pay‐as‐you‐go capital financing. While most local government debt financing is for capital purposes, some local units issue debt to finance cash flow needs or deficits in their operating budgets.

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Debt issuance The process of selling debt. Local governments issue debt in public sales or private placement. In a public sale, the local issuer sells its debt to bond or debt underwriters who then resell the debt to the investing public. In a private placement, the issuer places the debt directly with the ultimate investor, usually a bank or other financial institution, which holds the debt in its portfolio. See also private placement; public sale of debt

Debt limit or cap A constitutional or statutory limit that many states impose on local government general

obligation bonds and sometimes certain other types of debt. The limit is most often expressed as a percentage of the assessed value of taxable property in a jurisdiction. Revenue bonds are typically exempt from such debt limits. In many but not all states, certificates of participation and special or limited obligation debt also are exempt.

Debt retirement Repayment of debt. Debt service Annual or periodic principal and interest payments on debt. Debt service can sometimes

include certain fees, for example, for paying agent services or credit support.

Enterprise A government service to the public that is supported primarily by fees rather than taxes, accounted for in a separate enterprise fund, and operated according to business principles.

Enterprise fund A proprietary fund that accounts for a government‐owned enterprise. Local governments

use enterprise funds for water‐sewer, electric and gas, solid waste, storm water, airport, parking, and other services. See also enterprise

Financial adviser A consultant who advises an issuer about capital financing options, the amount and type

of debt to issue, debt structure, and other matters related to capital budgeting and finance. In negotiated sales of debt, the underwriter provides financial advisory as well as underwriting services. Some firms providing financial advisory services do not underwrite debt.

Fiscal year A designated twelve‐month period for budgeting and accounting purposes. Many local

governments’ fiscal years begin on July 1 and end on June 30; others begin on October 1 and end on September 30, which corresponds to the federal government’s fiscal year; and still others follow the calendar year, beginning January 1 and ending December 31.

Full‐faith‐and‐credit The unconditional pledge to repay the debt with all possible revenue‐raising

capabilities. See also general obligation bonds Fund A fiscal entity with a self‐balancing set of accounts that includes cash and other assets, related

liabilities, revenues, expenditures or expenses, and residual equities or fund balances. Governmental accounting information is organized and reported by fund to show the resources involved in carrying out specific functions.

Fund balance The difference between a governmental fund’s assets and liabilities. Portions of the fund

balance may be reserved or designated, for the purchase of capital assets. General fund A governmental fund that accounts for all transactions not accounted for in another fund. The

general fund typically accounts for governmental functions supported by general taxation—such as

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police and fire protection—and financial resources that legal requirements do not require to be accounted for in another fund.

General obligation (GO) bond A bond secured by a governmental issuer’s pledge of unlimited taxing

power. GO bonds also are known as full‐faith‐and‐credit debt because of the unconditional pledge to repay the debt with all possible revenue‐raising capabilities. In many states, the authorization of GO bonds requires the approval of voters in a referendum. See also revenue bond

General‐purpose infrastructure Infrastructure such as streets, roads, bridges, tunnels, greenways, parks,

and other long‐lived property that serves the general public and is financed with general taxes or rev‐enues, either directly or with bonds that are repaid from general taxes and revenues.

Grant Gift of money from one government to another organization. The federal government and state

governments give grants to local governments to help finance local capital projects. Unlike bonds or debt, grants do not have to be repaid.

Impact fee Charge to new development for public improvements that serve that development or that type of

development. Unlike special assessments, impact fees may be charged to finance infrastructure or facilities that are located at some distance from the new development paying the fees. They are usually levied when development is approved and often in advance of when the public improvements for which they are levied are built. Impact fees for residential development are often a specified dollar amount per residential unit. Impact fees for commercial and industrial development are often per square foot of improved space. Other terms for impact fees are “capital recovery charges” and “facility fees.” See also special assessment

Infrastructure Facilities that are available for public use, stationary, and generally have useful lives going

out many decades. Local infrastructure includes streets, roads, sidewalks, bridges, tunnels, stormwater and drainage systems, dams, water supply and sanitary sewer systems, and street lighting.

Installment‐purchase financing Type of capital lease in which the property acquired with the financing

secures or collateralizes the lease. Title to the property passes to the lessee at the inception of the transaction, and the lessor or lender holds a security interest or mortgage in the property to secure the lessee’s payments. If the lessee fails to make payments, the lessor may take legal steps to seize the leased property.

Intergenerational equity The notion that each generation of taxpayers should bear its fair share of the costs

of capital assets proportional to the taxpayers’ use of them. The concept often favors debt financing over pay‐as‐you‐go financing.

Interest The price or dollar amount charged at the end of a year or period of time for money owed or

borrowed during the year or period. The interest charged on most debt that local governments issue for capital financing purposes is paid each year, usually semiannually. The interest on some debt—for example, debt issued or sold on a discount basis—is not paid until the end of the debt’s term. Interest charged and earned in a year or period is added to the principal amount of the debt, and interest in the next year or period is charged on the principal amount of the debt and any earned but unpaid interest. See also debt; interest rate; principal

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Interest rate Ratio of interest to the principal amount of a loan or debt. Interest may be earned or compounded and paid annually or more frequently—semiannually, quarterly, monthly, or daily. Interest is typically quoted on an annual or annual equivalent basis.

Issuance costs The up‐front costs that a debt issuer incurs in selling or placing debt. Issuance costs for

publicly sold debt include fees for the bond attorney, bond ratings, underwriting, printing, and paying agent. Additional issuance costs are incurred for certain types of debt; for example, fees for financial advisory services, feasibility studies, underwriters’ counsel, trustee, title insurance, liquidity support, and other items. Debt issuance costs are customarily paid from debt proceeds.

Lease‐purchase financing A capital lease in which title to the leased property remains with the lessor during

the lease term or until the lessee exercises a purchase option to transfer title to the lessee. At the end of the lease term, the lessee pays a nominal purchase option to obtain title. See also capital lease; installment‐purchase financing

Long‐term obligations Long‐term obligations is a broad term that includes the jurisdictionʹs debt

obligations, as well as its future payments for pensions, retiree health care, and costs that result from labor contracts and other legally binding obligations. Those obligations are effectively, but not formally, equivalent to debt.

Mandate A federal requirement imposed on state and local governments or a state requirement imposed on

local governments. Mandates are often imposed without compensation from the higher level of government, which is known as an unfunded mandate. They have resulted in significant capital spending and debt issuance by local governments

Material fact Information that is significant to a decision. For the sale of bonds, a material fact is information

that is significant to investors as they decide whether or not to buy the bonds. If a material fact is omitted from an official statement used in selling the bonds or if a material fact in the statement is in error, the underwriters and others involved in the sale, including officials of the issuer, under Securities and Exchange Commission regulations could be held liable for investor losses and damages. If fraud is alleged, those responsible could be prosecuted criminally. See also official statement

Maturity date Date on which specific bonds or debt is scheduled to be retired. Needs assessment The identification of capital facility, infrastructure, and equipment needs over a long‐term

planning period. The planning period for capital needs assessment often extends 10, 15, or even 20 years into the future. Citizens and community groups as well as local officials are often involved. Capital needs assessment may take place as part of long‐term comprehensive planning or strategic planning processes. Specific financing for capital needs is usually not identified in a capital needs assessment process. See also capital improvement program

Negotiated public sale of debt A sale of debt in which the issuer first selects an underwriter or underwriting

group to handle the sale. The underwriter and the issuer negotiate and agree on debt structure and pricing. The underwriter advertises and markets the debt to potential investors, buys the debt from the issuer, and resells it to investors. See also private placement; public sale of debt

Notice of sale A document that advertises debt for sale competitively. The notice is a document several

pages in length that provides key information about the debt and the issuer that would be of interest to

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underwriters that may bid to buy the debt. In negotiated sales of debt, the underwriter often develops an abbreviated notice of sale.

Official statement (OS) Disclosure document used in debt sales to provide information about the debt and

the issuer to investors. Before the sale, the OS is called the preliminary official statement (POS) and provides information that investors need to evaluate the debt. After the sale, the POS is updated with information about the results of the sale and is reissued as the official statement.

Operating budget A budget that identifies revenues and spending for ongoing services and activities. Most

operating budgets are prepared and enacted annually and are called annual budgets. Some are prepared for biennial periods. The revenues and spending are or should be balanced for the year or operating period. The recommended operating budget is typically prepared by the manager or chief executive officer and presented in an operating or annual budget document. That document also may contain the recommended capital budget for the year. The legally enacted operating budget is approved by the governing board in an annual budget ordinance or resolution. See also capital budget

Operating capital Equipment, vehicles, and other capital assets that are budgeted and accounted for in the

operating budget rather than in the capital budget. Such assets are relatively modest in cost, and spending for them recurs annually or fairly regularly. They are readily financed from recurring revenues in the operating budget.

Opportunity costs The loss of benefits from an alternative investment that occurs when the selected

investment is made. Opportunity costs should be recognized and monetized when conducting cost‐benefit analysis.

Pay‐as‐you‐go capital financing Paying for capital projects and acquisitions from sources other than debt.

Pay‐as‐you‐go sources include current revenues, revenues raised in prior years and held as capital reserves, current or prior years’ charges to property such as special assessments and impact fees, and grant revenues from the federal, state, or other governments.

Principal The par value of debt and the amount that must be repaid at maturity. Private placement A method of borrowing money and incurring debt. In a private placement, the issuer

places the debt with a single lender or investor or with a small number (defined under rules of the U. S. Securities and Exchange Commission) of sophisticated investors. Local governments that issue less than $10 million in debt in a calendar year often place the debt privately with a bank or financial institution. Such debt is called “bank-qualified,” meaning that banks can deduct a percentage of their costs in purchasing and carrying the debt—see bank qualified debt for additional information on the $10 million.

Private-purpose debt Debt issued by state and local governments or their on-behalf-of issuers for essentially

private purposes. State and local governments issue private purpose debt to finance capital facilities for private, nonprofit hospitals, schools, and institutions of higher education; housing for low- and moderate-income persons; small business and industrial facilities; and other purposes. Private-purpose state and local government debt may or may not be tax exempt, depending on the objectives of current federal tax policy. Much private-purpose debt is subject to federally imposed state caps on such debt. Private-purpose debt is also subject to the alternative minimum tax.

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Public‐private partnerships A contractual relationship between a local government and a public sector entity for providing services or facilities to the general public.

Public sale of debt A sale in which an underwriter or underwriting group buys the debt from the issuer,

advertises it to potential investors, and resells the debt to investors. Public sales may be either competitive or negotiated, and they are distinguished from private placements of debt.

Revenue bond Bond secured by and repaid from specific and limited revenues. The pledged revenues are

most often net revenues or earnings from a self‐supporting utility or enterprise. Other revenue bonds secured by and repaid from revenues are derived from special or limited taxes.

Special assessment Charges to property for public improvements that benefit that property. The assessed

property is typically located near or adjacent to the public improvements. An assessment or benefit district or zone is established, and property within the district is assessed for the improvements. The assessments are typically based on the assessed property’s front footage or another acceptable basis. Revenues from special assessments are usually collected after the improvements are built. In many states, special assessments secure special assessment debt.

Special district A district formed to provide a specific service. The district may serve a broad area that

includes several general purpose local governments, a specific area within a single general purpose local government, or it may have borders coterminous with a general purpose local government. If the district serves a broad area, it is likely to have its own governing board. If it serves an area within a general purpose local government or has borders that are coterminous with a general purpose local government, that jurisdiction’s governing board often, but not always, serves as the governing board for the district. Most special districts are authorized to levy taxes as well as charge fees for service. Many special districts issue debt to finance capital projects. Such debt is usually special or limited tax debt. If the district provides a service fully supported by user fees, the debt may be revenue bonds. Some districts with unlimited taxing power issue general obligation bonds.

Tax increment debt Debt that is secured by growth in the property tax bases and resulting property tax

revenues in a tax increment district. The debt is typically issued to finance public infrastructure needed to support private economic development. Such debt is a form of special or limited obligation debt.

Tax increment district A defined geographic area in which revenue resulting from growth in the tax base,

after formation of the district, is pledged and used to pay off tax increment debt issued to finance improvements to support development in the district.

Time value of money Because of the risk associated with the future, money today is worth more than the

same amount of money in the future, and money in the near‐term future is worth more than the same amount in the far‐term future. Interest rates and interest‐rate formulas are used in capital finance to account for the time value of money and to convert cash flows occurring over time to a comparable basis of value.

Transfer policy Policy of a local government relating to transfers of revenues or financial resources from one

fund to another, especially from a utility or enterprise fund to the general fund or vice versa. The bond rating agencies expect local governments to have and follow transfer policies that protect the financial interests of the affected funds.

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Underwriter An investment banker, securities dealer, bank, or another party that buys debt from the issuer and resells it to investors. Underwriters also function as financial advisers in negotiated sales of debt. See also financial adviser; negotiated public sale of debt

User fees Fees paid by those who use public services. User fees cover all or most of the costs of local

government utility services and many other public enterprises. They secure and pay revenue bonds and other debt issued to finance utility or enterprise capital infrastructure and facilities. User fees also support a portion of the costs of many governmental or general fund services and sometimes are pledged as security for certain special or limited obligation debt.

*Glossary Source: Justin Marlow, William C. Rivenbark, and A. John Vogt. 2009. Capital Budgeting and Finance: A Guide for Local Governments, 2nd edition. Washington, DC: ICMA.

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Documents

Capital Budgeting Workbook