Council Scheduled to Review CIP
0
Votes

Council Scheduled to Review CIP

Town Council was scheduled to hear comment on fiscal year 2007-2011 Capital Improvement Program.

Two weeks after approving the town's fiscal year 2006 budget, the Town Council was scheduled to hear public comment on the proposed FY 2006-FY 2011 Capital Improvement Program.

Before the May 24 public hearing, at the request of town staff, council determined it would defer the vote to deny or approve the plan.

During its May 17 work session, multiple questions arose regarding the Capital Improvement Program (CIP), most centered on finances and how to reorganize projects.

In a staff report Michelle O'Hare, town planner, identified that the recently approved budget did not fully fund the CIP from FY 2007 to FY 2011.

"The identification of additional revenue sources or the postponement of projects will be necessary to balance the program," she said in her report.

O'Hare noted at its March 7 meeting the Planning Commission unanimously voted to recommend the council approve the draft CIP statement with specific changes.

These changes included the reduction in funding for the proposed FY 2008 sports fields and park improvements and the funding for the rehabilitation of the Hands Ink building.

The commission suggested a reduction from $580,000 to $290,000 for the sports and park improvements. They asked the resulting $290,000 be placed in the FY 2007 budget.

For the Hands Ink building they suggested a reduction from $550,000 in FY 2007 to $275,000.

But, when creating the draft CIP, staff relied on the town manager's proposed budget and real estate tax figures, which showed a one cent reduction in the tax to 27 cents per $100 of assessed value.

Because council approved a three cent reduction, bringing the FY 2006 real estate rate to 25 cents per $100 of assessed value, it now has to balance the CIP accordingly.

In addition to dropping the real estate rate as it did, council also reduced three FY 2006 capital projects.

These included a $10,000 reduction to the Information Technology project, a $75,648 reduction to the Municipal Center Security project and a $30,000 reduction to the Town Hall Rehabilitation project.

According to town figures, because of these changes the entire CIP program is under funded by roughly $2.9 million.

In addition, FY 2007 projects are under funded by $1.1 million.

In her report, O'Hare reminded council that the "CIP process provides an opportunity to consider the needs and priorities for the public facilities and utilities of Herndon."

She added that the CIP serves not only as a budget document for the upcoming fiscal year, but also as a short term planning tool for the succeeding five years.

DURING DISCUSSION council members debated what projects needed to be a top priority, and which ones could be moved to "out years" to alleviate funding pressures.

Mary Touhy, director of finance, identified two options staff created to increase funding.

One option was to place the proposed Runnymede Park nature center, estimated at $992,000, and the rehabilitation of the Hands Ink building, estimated at $275,000, into out years.

At its mid-year budget review, council removed funding for the nature center to finance another project, saying that money would be replaced in the upcoming approval of the CIP.

In addition, previous public comment indicated to council that residents are anxiously waiting for construction to begin on the nature center.

Touhy mentioned there also was a $125,000 grant for the center's construction that would be lost if pushed back.

But, she added if council chose this option, the two projects "would balance those deficits" in the CIP.

"The road improvements and other projects like the sports fields all have grants tied to them," she said. "That's why we can't delete those."

The other option suggested was increasing the town's revenue in FY 2007 by $781,000 because staff recommends at "a minimum FY 2007 be fully funded."

Touhy said this increase would balance the entire six-year program.

"This is not an easy option and certainly tying to revenue increases is difficult," she said. "So we are open to direction from the council."

Council member Dennis Husch quickly expressed his dissatisfaction with the second option.

"That proposal could be summarized as a permanent tax increase," he said.

Mayor Michael O'Reilly said there was a third alternative, where the council could decide to defer the payment of the town's water and sewer fund.

Because there is approximately $4 million in bond due for FY 2006, O'Reilly said council could move to repay all but $800,000 to $900,000 of that bond.

The decided remaining amount could then be used to balance the FY 2007 budget after deferring the rest of the payment to FY 2008, he said.

With this option he added comments about the nature center could still be on the table.

"If we proceed with downtown development projects in the next year," he said, "we may not need to do a rehabilitation to the Hands Ink building."

COUNCIL AGREED before making any major changes to the CIP they wanted a list of projects with waiting grants.

Because many grants are awarded with time limitations, council does not want to lose necessary outside funding on major projects.

In addition, council member Steven Mitchell said he wanted to hear public testimony and suggestions for which projects could afford to be placed on the back burner.

"Runnymede Park is a big commitment and those people have been waiting a long time," he said. "At the same time, that's a lot of money to spend without knowing everything."

He added because the Foundation for the Arts of Herndon had recently donated money to the town for an architectural and engineering review of the Hands Ink building, money for rehabilitation could be premature.

"The $275,000 for Hands Ink, that wouldn't bother me to see that money shifted out," he said, adding if a downtown development plan is initiated, the proposed arts center for the Hands Ink building would be incorporated.

"I am extremely disappointed to see Runnymede on the list, that should be non-negotiable," said council member Carol Bruce about the suggested bump back. "I would like to see [the Hands Ink building] stay put until we know more about what we're doing downtown."

Council was scheduled to hear public comment on the proposed CIP, which currently contains 43 projects for the six-year cycle, 32 being General Fund projects and 11 being Enterprise Fund projects, at its May 24 hearing held after the Connection's deadline.

In addition, council was scheduled to hear public testimony on a proposed land use at 1201 Elden Street for the construction of a bank, office space and a restaurant. Council was also scheduled to hear comment regarding a Winchester Homes application for the rezoning of Van Buren and Grant Streets to allow for the construction of 34 townhouses.