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Introduction & Overview

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Introduction & Overview City of Flint Capital Improvement Plan • Introduction & Overview DRAFT – 1.10.16 1 CAPITAL IMPROVEMENT PLAN I INTRODUCTION & OVERVIEW The introduction to the WHAT IS Definition of Capital CIP and Budgeting Capital Improvement Plan A CAPITAL Improvements A CIP is typically (CIP) is divided into three IMPROVEMENT PLAN? Capital improvements are prepared and adopted sections: annually by the Planning A Capital Improvement Plan permanent physical • What is a (CIP) is a multi-year improvements, generally Commission and is Capital expected to have a normal presented as a Improvement program for expenditures Plan? by the City of Flint for life of ten years or longer. recommendation to the Equipment and objects Mayor and the City • Why Prepare a CIP? rehabilitation, replacement, and needed for day-to-day use Council. • How Does the CIP Each year, the plan Relate to the balancing of the City’s are generally not Master Plan? municipal infrastructure considered capital identifies the physical systems. Projects improvements. Smaller needs of the City’s considered through the CIP projects and projects that departments, estimates the process involve proposed are intended to last for costs of proposed projects, investments in the City’s fewer than ten years are and recommends infrastructure and funded through the City’s expenditures and sources facilities, such as police operating budget. of funding for priority and fire stations, parks and capital improvements. recreation facilities, As such, the CIP plays an community centers, integral role in the process offices, roads and of formulating the City’s sidewalks, and utilities. annual capital budget. City of Flint Capital Improvement Plan DRAFT – 1.10.16 1 City of Flint Capital Improvement Plan • Introduction & Overview DRAFT – 1.10.16 20 Year Horizon BENEFITS OF THE CIP The Flint CIP is a 6-20 year plan of programmed • Assist in implementation of the Master Plan. projects for the City’s • Identify both short- and long-term capital expenditures to allow budgeting. municipal infrastructure • Determine regular maintenance needs for City facilities so they remain viable. systems. The first two years of this plan should • Provide for a more effective evaluation of alternatives and solutions than the crisis- form the basis for the City’s decision process. two-year Capital • Enhance opportunities for grants by allowing for long-term planning. Approval of annual budgets • Provide the ability to stabilize debt and consolidate projects to reduce borrowing costs. allocates funds to undertake projects in this • Serve as a public relations and economic development tool. period, thus beginning the • Allow for a focus on preserving infrastructure while ensuring efficient use of public funds. implementation of the CIP. • Identify actual infrastructure needs of the City, including cases where In addition, capital projects additional funding is required beyond what is available locally. that will need to be • Provide opportunities for cooperation between departments and other units of implemented between government, such as Genesee County and Flint Community Schools, by pooling years 7 and 20 are also resources to reduce costs in some instances. included to provide a basis for future updates to this CIP. Given the uncertainty around the availability of funds primarily tied to the budgets associated with water and sewer revenue, many of the necessary improvements that are planned in the 6-year CIP period are ultimately considered unfunded in this CIP. 2 City of Flint Capital Improvement Plan DRAFT – 1.10.16 City of Flint Capital Improvement Plan • Introduction & Overview DRAFT – 1.10.16 CAPITAL IMPROVEMENT with positive balances in all immediately reduce its City’s funds, the 2016-2021 of its funds. Cash position water and sewer rates. In CIP update largely repeats the PLANNING IN FLINT had drastically improved, addition, the order barred City’s prior capital The City of Flint has been and the FY16 and FY17 the City from shutting off a improvement plan with significantly impacted by Budgets are realistically service for non-payment of projects postponed by one factory closures and balanced. water and subsequently fiscal year. Emerging capital population loss, with an 18% banned them from improvement projects have decline in population Looking forward to FY18 collecting delinquent been added and all existing between the 2000 and 2010 and beyond however, the balances prior to August 17. projects have been update to census. The loss of jobs and City will continue to face This ruling led to a projected reflect any changes in priority population and decline in significant challenges as City amount of approximately or estimated cost. local tax revenue and state- expenditures (expenses) are $11 million in uncollectible shared revenues has had a projected to outpace any accounts, or money the City A Common Issue significant impact on the increases in revenues. This was entitled to but not able City’s finances. The City The City of Flint, like many will lead to operating to collect on. It has also municipalities in the United returned to state deficits in many of the City resulted in significant drops receivership in December States, has been severely funds. Water rate increases in the number of payments impacted by the recession. In 2011, as a result of and the potential renewal being received from consistent deficits in the the wake of the Great of two City millages (Public customers. Recession, many local General Fund, a decline in Safety and Parks and pooled cash, poor budgeting governments in Michigan Recreation), have the ability As a direct result of the have witnessed a decrease in practices, and unfunded to assist the City’s budgets Court ruling and in order for liabilities for retiree property tax and income tax through long-term, ongoing the City to respond to this revenues while seeing the benefits. revenue. This stable income loss in projected revenue, a level of state- shared revenue Significant progress has could fund many much spending and hiring freeze reduced. needed capital across the City was been made in addressing improvement projects. That implemented. At this time, the financial issues leading With less money coming in, being said however, even the freeze remains in effect. to the assignment of an younger communities with with this funding additional emergency manager, as the relatively new infrastructure sources of revenue will be For water and sewer funds, $19.1 million deficit at the have been able to cope with required or decreases in it was necessary to identify end of FY12 had been severe budget reductions by operating costs must occur projects which could be eliminated by the end of postponing planned for the City to recognize any eliminated or postponed to FY15, largely as the result of infrastructure installation or progress towards improving lessen the financial burden a $7 million emergency loan. expansion. In established its capital. of the order while communities like Flint, th maintaining ongoing daily On April 29 , 2015 the however, budget cuts have While the City continues to operations so the City could Emergency Manager notified led to deferred maintenance await the ruling of litigation function. To that end, many the Governor of Michigan on existing infrastructure. over retiree healthcare, a of the water and sewer that the financial emergency This has often resulted in result that could devastate capital improvements were in Flint had been resolved. deterioration that now the City’s financial position, eliminated or postponed At that time, the Governor requires significant a number of issues multiple years with the relieved the Emergency expenditures to catch up. emerging in Q1 of FY16 exception of any projects Manager of his have adversely impacted necessary to ready the City responsibilities and a Many of the improvements the ability to complete even for receipt of water from Receivership Transition listed in the CIP are a direct planned FY16 capital the Karegnondi Water Advisory Board was created response to both the years of improvements. Authority (KWA). to oversee the transition of neglect due to severe city affairs, to its charter- budgetary issues and the fact On August 17, 2015 a As a result of the spending designated officials. that there has not been a preliminary injunction order freeze and postponement of Master Plan or was issued against the City capital improvement For the first time in nearly a comprehensive CIP developed requiring that the City projects in many of the decade, the City began FY16 for the City in decades. City of Flint Capital Improvement Plan DRAFT – 1.10.16 3 City of Flint Capital Improvement Plan • Introduction & Overview DRAFT – 1.10.16 Flint Water Crisis Rising Cost of Deferred and appointed officials, percent wage reduction for In April 2014, the City of Maintenance and staff, working under remaining employees, and the Flint formally transitioned Providing ongoing the oversight of an restructuring of health and its primary source of maintenance, such as Emergency Manager retirement benefits for drinking water by resurfacing streets and appointed by the current employees and connecting to the Flint repairing or replacing leaky Governor, have taken retirees necessary to develop River. As a result of this roofs, is vital for several steps to make a credibly balanced spending switch, the corrosive nature maintaining the condition capital expenditures more plan. The City continues to closely reflect long-range work towards a process of
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