FY 2020 CITY MANAGER’S PROPOSED BUDGET

FY 2020 CITY MANAGER’SPROPOSED BUDGETFY 2020 – FY 2029 Capital Improvement Program (CIP)February 27, 2019

AGENDA CIP Development Process CIP Highlights CIP Process Improvements Future Debt Service Pressures2

DEVELOPMENT PROCESS FY 2020 is the Interim Year of aTwo-Year CIP DevelopmentCycle September 2018: departmentssubmitted capital project changerequests September 2018 – December 2018:Capital Improvement ProgramSteering Committee (CIPSC) craftedrecommendations for the CityManager January 2019 – February 2019: CityManager held numerous meetingsto discuss recommendations andthen finalized Proposed CIPWhat is CIPSC? Committee of most capitalintensive City departments(T&ES, RPCA, DGS, ITS, DPI, andP&Z), charged with: Crafting recommendations for abalanced proposed CIP Identifying policy priorities andthemes for the CIP Presenting recommendations to theCity Manager Committee was chaired byDeputy City Manager EmilyBaker3

FY 2020 - FY 2029 USES 1.6 BILLIONTransportation 237.1 MACPS 447.6 MOther RegionalContributions 8.9 MWMATA 143.3 MIT Plan 64.6 MCommunity Development 145.5 MSanitary Sewers 65.2 MStormwaterManagement 71.0 MCIP Development &Implementation Staff 77.8 MPublic Buildings 150.2 MRecreation & Parks 86.7 MReservation of BondCapacity/Cash Capital forCity/School Facilities 119.1 M4

PUBLIC BUILDINGSWITTER/WHEELER CAMPUS PLANNING The Joint Facilities Task Force recommended that theCity set aside 35.5 M to reconfigure and upgradethe Witter/Wheeler campus of City facilities and aschool facility Plan to undertake a comprehensive site survey todetermine best options for site redevelopment 2.6 M in City Fleet Building improvements and 6.7M in funding related to the School TransportationFacility shifted to FY 2022 from FY 2020 to align withWitter/Wheeler study Currently watching for land acquisition opportunities5

TRANSPORTATION & TRANSITSMART MOBILITY Applies informationtechnology to transportationto collect, analyze and applydata to transportationnetwork Improve HOW we travel byproviding more affordable &sustainable mobility choices Three main components: Fiber optic cable network Traffic cameras and sensors Smart traffic signals 10-Year Program: 17.4 M6

TRANSPORTATION & TRANSITSTREET REPAVING & RECONSTRUCTION Pavement Condition Index (PCI)quantifies street health,conducted every three years Most recent PCI, conducted in 2016 Citywide score of 58 Goal is 71 FY 2020 will fund approximately55 lane miles of reconstructionand repaving FY 2020 is funded with VDOTRevenue Sharing grants ( 1.3 M)and City funds ( 4.2 M) 10-Year Program: 51.1 M7

TRANSPORTATION & TRANSITWMATA CAPITAL SUBSIDY Proposed CIP fully funds City’s FY 2020 portion ofproposed WMATA CapitalProgram ( 12.4 M), and City’s Share of the local matchfor dedicated state revenue( 4.3 M) 10-Year Program: 143.3 MFunding SourceCity Appropriated SourcesGO Bond Interest EarningsGO BondsGO Bonds Planned for WMATA in FY 2019FY 2019 Funding Sources Grand TotalFY 2020Amount 0.05 M 9.65 M 7.00 M 16.7 MFinal State Dedicated Fundinglegislation in 2018, whileresulting in an approximately 25 M annual benefit to theCity, also resulted in the loss of 2.2 M per year in NVTA 30%revenue available to the City.8

INFORMATION TECHNOLOGY PLANMUNICIPAL FIBER Approved FY 2018 and FY 2019 funds ( 10 M) arecurrently being used for the design of the MunicipalFiber project Design of the fiber network is underway Joint-build opportunities with TES are being evaluated Implementation Invitation to Bid (ITB) for construction planned for fall 2019 Engineering/Construction phase will take at least 24 months9

INFORMATION TECHNOLOGY PLANALEXANDRIA JUSTICE INFORMATION SYSTEM (AJIS) AJIS system services the Clerk of the Court, theCourts, Commonwealth’s Attorney, Office of theSheriff, APD, the public and other judicial partners The current AJIS system is 20 years old In FY 2018, a system assessment was performed thatrecommended an eventual full system replacement FY 2019 funding was used to stabilize the currentsystem, and rebuild the public web portal In FY 2020 the City will finalize a procurementstrategy and prepare for implementation activities Total Cost: To-be-Determined10

INFORMATION TECHNOLOGY PLANPUBLIC SAFETY SYSTEMS E-Citations E-Citations will fully automate the ticketing process formoving violations, from the creation of the ticket toprocessing within the courts Project will follow the successful completion of a pilot programinitiated in FY 2019 FY 2020 funding will be used to implement the system,purchase equipment, (handheld devices, mobileprinters, etc.) and pay initial software licensees FY 2020: 420,00011

COMMUNITY DEVELOPMENTOLD TOWN GADSBY LIGHTS Provides forreplacement of all (750)existing Gadsbystreetlights within theOld and Historic District Majority of Gadsbystreetlights are over 40years old and havereached the end of theiruseful life Rust poses significantsafety issue at many polelocations 4 year / 3.8 M planPole Removed from King StNew streetlight fixtures willutilize LED technology, whichare more energy efficient,provide better light distribution,and have a longer useful life.12

COMMUNITY DEVELOPMENTCITYWIDE STREET LIGHTING Provides for upgradingexisting fixtures citywide(approx. 10,000 lights) to LEDover the next two years New fixtures will be smartsensor capable Timing of implementation iscontingent on coordinationwith Dominion’s ability tocomplete installation in 2years 2 year/ 1.8 M planCobraBasicAcornCarlyleAcorn13

COMMUNITY DEVELOPMENTWATERFRONT IMPLEMENTATION ( 50.1 M) Constructing newbulkhead at the shorelineto a consistent elevation of6’ (about 1’ to 3’ increase) Shoreline from Duke toQueen Streets (core area) New and reconstructedupstream storm sewersystem to drain to twopump stations14

COMMUNITY DEVELOPMENTWATERFRONT IMPLEMENTATION Funding authorization consolidated to FY 2021 to allowflexibility in construction contracting method Progressive Design-Build (PDB) Collaborative process with early contractor involvement toadvance design Design decisions based on transparent cost estimates, schedule,operability, etc. to ensure owner requirements are met Final design and construction proposal submitted at 40% to 60% ofdesign If price cannot be mutually agreed upon, City would own drawingsand specifications and could then bid project As with entire CIP, this project will be repriced for FY 2021– FY 2030 CIP15

COMMUNITY DEVELOPMENTOHA INITIATIVES ( 515,000) Ship Digital Documentation Ft. Ward Repairs 517 Prince Street HistoricalProperty Master Plan Equal Justice Initiative (EJI)Monument Waterfront History Plan (FY2021)16

JOINT CITY-SCHOOL FACILITIES INVESTMENT TASKFORCE RECOMMENDATIONS CIP Decoupling from Annual Budget Process Series of worksessions proposed to be held in the fall todiscuss CIP issues Allows for more time for City Council to discuss CIP andprovide input that informs City Council BudgetGuidance and City Manager’s Proposed FY 2021 – FY2030 CIP Project Phasing CIP Steering Committee is working onrecommendations to add additional stage-gating to CIPto inform the placement and specificity of projects inthe 10-year plan17

FY 2021 CIP DEVELOPMENT Construction Re-Costing FY 2021 will represent a full-development year for CIP Departments (including ACPS) will be asked to reevaluate scope,funding needs, and funding timing for all projects in the CIP Significant increases in construction related costs are anticipated Nationwide, construction costs are being pressured by Increased inflation,Labor shortages,Material cost increases, andFuel cost increases Mortenson Construction Cost Index predicts (nationwide) a 6% to 8% increasein nonresidential building construction costs for 201818

FUTURE DEBT SERVICE PRESSURE Proposed 10-year CIP is consistent with CityCouncil Adopted Debt Management Policies andconsistent with current AAA/Aaa Bond Ratings Planned investments School and City projects willput significant pressure on the City’s GeneralFund19

FUTURE DEBT SERVICE PRESSUREGENERAL FUND SUPPORTED DEBT SERVICE (CITY & SCHOOLS)MillionsFY 202911.70% 1,000 900FY 20208.67% 800 700 600 500 400FYFYFYFYFYFYFYFYFYFYFYFYFYFYFYFYFYFYFYFYFY2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029Other General Fund ExpendituresTotal G/F Debt Service20

FUTURE DEBT SERVICE PRESSUREGENERAL FUND SUPPORTED DEBT SERVICE AS PERCENTAGE OF GENERAL FUND14.00%12.00%% of General YFYFYFYFYFYFYFYFYFYFYFYFYFY2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 202921

FUTURE DEBT SERVICE PRESSUREFIVE YEAR FINANCIAL FORECASTFY 2020 – FY 2024 Forecasted Surplus/(Shortfall) 0.0 0.0( 10.0)( 20.0)( 27.0)in millions( 30.0)( 40.0)( 42.3)( 50.0)( 60.0)( 68.2)( 70.0)( 75.3)( 80.0)FY 2020FY 2021FY 2022FY 2023FY 2024Increased debt service is a major driver of forecasted shortfall. In FY 2024, 36.9 M offorecasted gap is attributable to increases in projected debt service.22

FUTURE DEBT SERVICE PRESSUREMillionsSCHOOLS DEBT SERVICE AND OTHER CITY DEBT SERVICE 70 60 50 40 30 20 10 FY 2018ActualsFY 2019EstimatedFY 2020FY 2021FY 2022FY 2023Schools Debt ServiceFY 2024FY 2025FY 2026FY 2027FY 2028FY 2029City Debt ServiceNote: FY 2020 – FY 2029 represent projected debt service, based on the Proposed 10-year CIP.23

SCHOOLS ( 478.8 M)10-Yr. Total(millions)Base Funding 447.1Mount Vernon Roof 0.5Use of Reserved Bond Capacity & Cash Capital 31.2City Manager’s Proposed FY 2020 – FY 2029 CIP 478.811. Equals School Board Approved 10-year CIP (FY 2020 – FY 2029) plus MountVernon Roof assistance previously approved by City Council.24

MillionsACPS FUNDING COMPARISONCity Council ApprovedFY 2019 - FY 2028 CIP 474.7 M 500School Board AdjustedFY 2019 - FY 2028 CIP 474.7 MCity Manager ProposedFY 2020 - FY 2029 CIP 478.8 M 450 400School Board ApprovedFY 2020 - FY 2029 CIP 478.2 M 350 300 250 200 150 100 50 FY 2019FY 2020FY 2021School Board AdjustedFY 2019 - FY 2028 CIPFY 2022FY 2023FY 2024City Council ApprovedFY 2019 - FY 2028 CIPFY 2025FY 2026FY 2027FY 2028School Board ApprovedFY 2020 - FY 2029 CIPFY 2029City Manager ProposedFY 2020 - FY 2029 CIP25

FUNDING FOR ACPS CAPITAL PROJECTS 140.0 MRepresents shift ofTransportation FacilityFunding from FY 2020to FY 2020 to alignwith Witter/WheelerCampus planning. 119.8 M 120.0 M 100.0 M 76.2 M 80.0 M 60.7 M 60.0 M 51.8 M 42.3 M 36.8 M 40.0 M 31.7 M 29.1 M 20.0 M 15.8 M 14.0 MFY 2020FY 2021FY 2022FY 2023FY 2024FY 2025FY 2026FY 2027FY 2028Direct FundingOut Year ContingencyWitter/Wheeler Transportation FacilitySchool Board Approved FY 2020 - FY 2029 CIPFY 202926

FUNDING SCHOOL CAPITAL PLANFY 2020 FY 2029 Change State law (22.1-102)allows for a separate tax Debt Service Impact 28.1 M 48.6 M 73%of Proposed CIPfor school debt service,Cash Capital 11.6 M 14.0 M 21%cash capital, and/or rent Tax rate would be set byTotal G/F Impact 39.8 M 62.6 M 58%City Council and appearIn Real Estate Tax9.7 TBDRate Equivalentas separate rate anddollar amount on tax bill Separate school capital tax rate, if implemented, would reducefinancial pressure on School Operating Fund and General Fund School capital funding tax is proposed to be studied and aspecific plan developed for City Council and School BoardConsideration Targeting a fall 2019 decision, for FY 2021 implementation27

FY 2020 CITY MANAGER’SPROPOSED BUDGETFY 2020 – FY 2029 Capital Improvement Program (CIP)Background SlidesFebruary 27, 2019

LAST YEAR’S CIP COMPARED TO PROPOSED CIPMajor Changes: 400.0 350.0 300.0 in millions 250.0Reflects transfer of CSO project toAlexRenewReflects shift of new state funding forWMATA from pass-thru to the City, todirect to WMATAReflects acceleration of Waterfrontflood mitigation project funding 200.0 150.0 100.0 50.0 0.0FY 2019FY 2020FY 2021FY 2022Approved FY 2019 - 2028 CIPFY 2023FY 2024FY 2025FY 2026FY 2027FY 2028FY 2029Proposed FY 2020 - 2029 CIP2