GENERAL CAPITAL PROJECTS FUND

Program Description: The Pay-As-You-Go (PAYG) Budget provides funding for capital improvements using current year tax revenue, fund balance, state and federal grants, developer fees, and inter-jurisdictional revenue. Annual PAYG appropriations and voter approved bond financing are the primary sources of funding for the capital projects included in the Biennial Six-Year Capital Improvement Program (CIP). Detailed information concerning the County's bond financing is contained in the Debt Service section of the FY 2006 Proposed Budget.

Capital maintenance activities differ from operating maintenance activities in cost, size, nature, and frequency of occurrence of the maintenance activity. The capital program includes the following types of governmental activities and program categories:

• Implementation of capital project activities such as engineering studies, land acquisition, construction, asset preservation, and acquisition of equipment (rolling stock is excluded) with a 10 year life and cost of typically more than $100,000.

• Capital maintenance activities for existing infrastructure that are major upgrades, expansions, and renovations that significantly alter or extend the useful life of the assets.

The County's General PAYG categories, funded by current-year tax revenue, capital reserve funds, fund balance and state and federal grants, include Local Parks and Recreation, Transportation and Pedestrian Initiatives, Storm Drainage, Government Facilities, Information Technology Investments, Community Conservation, and Regional Partnerships.

The Proposed FY 2006 Utilities PAYG Budget is funded by utility operating revenue (shown as a transfer from the Utilities Fund), charges to neighboring jurisdictions for sewage treatment, developer "Hook-Up" fees, and state grants.

Overview of FY 2006: The County Government's FY 2006 Proposed budget includes no base funding for PAYG.

Recognizing this is a large unmet need, the County Manager is proposing additional new fees and taxes for the Board to consider to support a base PAYG budget. In addition, once tax relief is determined by the County Board, any funds remaining could be considered for PAYG projects, as has been the practice for the last few years.

The Utilities Fund FY 2006 Proposed PAYG budget of $13.54 million includes funding for plant capital maintenance and improvements to the Washington Aqueduct, which supplies the County with 100% of its drinking water.

The School Superintendent's FY 2006 PAYG planning estimate is $3.85 million. The School Superintendent's Proposed FY 2006 PAYG Budget is scheduled to be presented to the School Board on March 3, 2005.

Fiscal impact is the net increase in annual operating costs associated with a capital funding decision. Capital funding decisions that expand or significantly change the nature and quality of an asset typically increase future operating budgets over the life of the asset. However, some capital funding decisions that replace current assets with efficient, low maintenance assets or extend the useful life of an asset can reduce future operating budgets.

Fiscal impact is included as a factor to be considered when prioritizing proposed capital projects for funding and implementation. When prioritizing funding decisions, the direct fiscal impact of a project is also considered in light of community benefits and other intangible impacts, such as safety and quality of life.

County capital project descriptions, PAYG appropriation charts, and fund statements are included on the following pages. Appropriations rather than actual expenditures are presented because appropriations indicate more about County Board priorities, decisions, and PAYG funding levels than actual expenditures.

I. REGIONAL PARTNERSHIPS

Arlington annually contributes capital funding to several regional organizations which provide beneficial services to Arlington residents and visitors.

Northern Virginia Community College
Tier 1 - $195,000
This proposed funding represents the County's ongoing capital contribution to the Northern Virginia Community College (NVCC) program to construct a community center at each of its five campuses and to contribute to NVCC's overall capital program. Arlington is one of nine jurisdictions that NVCC's capital program receives funding from based on population.

Northern Virginia Regional Identification System
Tier 1 - $32,000
This proposed funding represents the County's FY 2006 share of improvements made to the regional fingerprint identification system's image and retrieval capability. This upgrade was financed as a multi-year, lease-purchase agreement and provides Northern Virginia's law enforcement agencies with a more efficient, accurate, and cost-effective means of identification.

Peumansend Creek Regional Jail Authority
Tier 1 - $210,000
This proposed funding for FY 2006 represents the County's proportional share of the FY 1992 decision to design, construct, and operate a low‑to‑medium security regional jail in Caroline County on land (Fort A. P. Hill) transferred by the Department of Defense. Arlington is one of six jurisdictions that provide funds based on the allocated beds. This is part of an overall strategy for housing local prisoners in a cost-effective manner. Legislation in the 1996 General Assembly provides for a state reimbursement of 50 percent of allowable construction costs. Arlington's annual share of the capital cost is based on current bed allocation and is projected at 18.46 percent for the 60 beds allocated to Arlington. The County has provided a moral obligation, "joint and several" pledge on this financing and will have capital commitments from this bond financing through the year 2017 as well as ongoing operating commitments as a member of this Authority.

Northern Virginia Regional Park
Tier 1 - $492,000
The Northern Regional Park Authority (NVRPA) is a multi-jurisdictional agency comprised of Arlington County, Fairfax County, Loudoun County, Alexandria, Falls Church, and the City of Fairfax. The Park Authority owns and operates 11,000 acres of parklands with 18 major parks, including Potomac Overlook, Upton Hill and the W&OD Regional Parks in Arlington. This proposed capital funding for FY 2006 represents Arlington's annual contribution to NVRPA's capital program and is based on the percentage of population of the six jurisdictions.

Northern Virginia Criminal Justice Academy
Tier 1 - $168,000
In FY 1993, the participants in the Northern Virginia Criminal Justice Academy (NVCJA) agreed to purchase a building in Loudoun County to house the NVCJA's programs. Previously, the NVCJA occupied leased space in Claremont School in Arlington that was reclaimed by Arlington Public Schools. This proposed capital funding for FY 2006 represents Arlington County's share of the lease‑rental payments for the facility. The local debt service shares will gradually decrease now and end in FY 2008.

• Fiscal Impact - The Regional Partnerships program represents the County's annual contributions to support the capital efforts of regional programs. Because these are outside agencies, there are no direct County operating costs.

II. Capital Asset Preservation Program

The purpose of Arlington's Capital Assets Preservation Program (CAPP) is to ensure that existing capital assets throughout the County are maintained in reliable, serviceable condition and periodically updated and renewed as necessary. Through the Capital Improvement Program, the County has invested a significant amount of financial resources in building its infrastructure. The CAPP program serves to prolong the useful life of these investments.

In order to determine the size of a CAPP program, details about the County's infrastructure are required. A condition assessment study for County facilities has been completed, and funding is proposed to complete an assessment of parks facilities county-wide. Currently, the Transportation CAPP funding level is based upon the county-wide Pavement Condition Index. Funding proposed for the Technology CAPP is based on the recently completed technology master plan. The results of the studies form the justification for CAPP funding recommendations. It is anticipated that CAPP funding recommendations will increase over time, as more asset data becomes available.

There are several criteria a project must meet in order to be funded from CAPP. It must be a bona fide non-expansion project which does not change the footprint of a building, expand a current asset, provide resources for services not already being undertaken, or increase the operating budget once complete. For example, the Transportation Infrastructure CAPP is funded to maintain the condition of Arlington roads, but it would not fund the construction of new turn lanes or travel lanes. Also, a project must significantly extend the life of the asset and meet the criteria for a capital project. Finally, CAPP funds are not contingency funds. CAPP plans are intended to eliminate repeated asset repair emergencies. However, CAPP funds are versatile in responding to unseen emergencies.

Facilities Capital Asset Preservation Program
Tier 1 - $1,000,000
Tier 2 - $1,000,000
Arlington County currently maintains over $500 million in public facilities. The Facilities CAPP program funds the repair, replacement and technology update of over 90 existing public buildings, many of which have been in continuous use for as many as 40 years. In order to protect the community's investment in those assets, an adequate level of dedicated funding is required to provide for repair, replacement, and rehabilitation. Funding replaces or upgrades deficient equipment, materials, and systems that have exhausted their useful life. A Facilities Assessment Study was completed in 2004. The FY 2006 proposed funding represents a substantial increase over FY 2006 as the County begins to increase program capacity to implement the study's recommendations. Tier 1 funding will only address those items identified as "life safety" in the assessment study. Tier 2 funding would be used to address building systems which have failed or are beyond their useful life.

Transportation Infrastructure Capital Asset Preservation Program
Tier 1 - $1,000,000
Tier 2 - $1,225,000
The Transportation CAPP program maintains the transportation infrastructure by repaving streets, maintaining pedestrian and vehicular bridges, maintaining signals and signal infrastructure, and replacing bus shelters. The County currently maintains over 950 lane miles of streets with a goal of maintaining a Pavement Condition Index (PCI) in the mid 70s by a combination of rebuilding, resurfacing and slurry seal maintenance. Bridge rehabilitation is determined based on a biannual inspection of the County's 28 bridges. The traffic signal portion of the CAPP funds the replacement of older signals, signal cabinets, upgrading to LED signal heads, and maintaining and upgrading the communications plant. The goal of the bus shelter program is to replace approximately 10 of the 115 bus shelters each year. Tier 1 funding level would be used solely for the paving program and provide for approximately 40 lane miles of repaving along with funding for rebuilding and slurry seal. The additional funding in Tier 2 would provide for 15 additional miles of repaving and would also fund the remaining Transportation infrastructure replacement programs.

Parks & Recreation Capital Asset Preservation Program
Tier 1 - $500,000
Tier 2 - $1,500,000
Arlington currently maintains an inventory of park and recreation assets including approximately $15 million in playgrounds, $16 million in athletic fields, $11 million in trails, $3 million in lighting, and $12 million in athletic courts. Additionally, over 750 picnic tables, 500 benches, 150 grills, and 75 kiosks are located in parks throughout the County. The Parks & Recreation CAPP program maintains these assets in a serviceable condition. Continued development of the CAPP program will include the development of a more detailed Park & Recreation capital asset inventory that will project an annual capital maintenance and replacement schedule. Funding for this study is proposed for FY 2006 funding in Tier 3. Future funding proposals will be based on updated condition surveys, best management practices, and recommended maintenance and replacement cycles. The FY05 program funded the major renovation/replacement of two athletic fields, three parking lots and the A&E to design lighting for an athletic field and a portion of the costs for a playground, a comfort station and lights for the athletic field. It is anticipated that the FY06 program will be used to fund a similar level of projects. Tier 1 funding will be used to address those top few items identified as critical. Tier 2 funding would be used to address park facilities which have failed or are beyond their useful life.

Information Technology Capital Asset Preservation Program
Tier 2 - $1,346,000
These projects represent re-investment in existing systems to provide modernization, refresh, or replace existing capabilities. Specifically, projects for FY 2006 include the following:

• Revenue Collection System Replacement - Replace the existing mainframe revenue assessment and collection system with current technology and expanded business functions. The existing system was developed in-house and is over 20 years old and is unable to be expanded to meet legislative changes to the personal property tax law taking effect in July 2006. This initiative will eliminate the County's reliance on the mainframe for revenue assessment and collection purposes and move the County to a platform that is more flexible, better supports the business functions, and improves the efficiency of the Commissioner of Revenue and the Office of the Treasurer. The first phase of the project will be to implement the personal property tax functions in time for the tax law changes. ($720,000)