MECKLENBURGCOUNTY

Office of the CountyManager

County Manager’s FY2006-2008 Capital Improvement Program Transmittal Letter

To: MecklenburgCounty Commissioners and residents:

I am pleased to provide the CountyManager’s FY2006-2008 Recommended Capital Budget and 2006-2016 Capital Improvement Program (CIP) for MecklenburgCounty.

The FY2006-2016 CIP identifies the County’s long-term infrastructure needs and establishes a timeframe to achieve short-term objectives in pursuit of long-term goals identified in the Board’s Community & Corporate Scorecard. The FY2006-2008 Recommended Capital Budget identifies the projects that must be initiated this fiscal year to achieve these goals and objectives.

The FY2006-2008 Capital Budget is the first capital budget submitted under the Board’s revised policy of developing an annual capital budget. In addition, this recommendation is also consistent with the seven goals and six budgeting strategies articulated in the operating budget recommendation. I expect that we will more fully integrate the capital budget with the Board’s Community & Corporate Scorecard as we review the capital needs of the County annually.

FY2006-2008 Recommended Capital Budget

The FY2006-2008 County Manager’s Recommended Capital Budget provides $211.7 million in total funding for 27 new County and Charlotte-Mecklenburg Schools (CMS) projects. Of this total, $39.85 million is for nine County projects, including three projects for the Public Library of Charlotte and MecklenburgCounty. The remaining $171.8 million is for 18 CMS projects recommended by the School Building Solutions Committee (SBSC).

To fund these projects, I am recommending the County use its available Pay-As-You-Go (Paygo) funds and issue Certificates of Participation (COPs) totaling $203.4 million. No bond referendum will be required to finance these projects this year.

Capital Budget Principles and Key Funding Strategies

Because both the Scorecard and CIP contemplate multi-year undertaking, our annual capital budget must consider not only the pending fiscal year, but also how each fiscal year fits into the Board’s long-term objectives. To ensure consistency in our approach, we have established the following guiding principles for both the operating and capital budgets.

  • First, the budget must be understandable to the Board and the public. Therefore, we strive for transparency in how money is allocated and the results achieved.
  • The budget also must be responsible in addressing the community’s needs. In fact, this is part of my statutory obligation in recommending a budget to the Board.
  • A third principle is that the budget must be sustainable, ensuring a consistency and stability of services that achieve desired results.
  • The budget also must be affordable to Mecklenburg taxpayers.
  • Finally, the budget must identify choices and consequences to ensure the Board has the information it needs to make informed choices.

In the capital budget, these principles are supported by three key funding strategies as follows:

  1. The County should meet legal mandates for facilities. (Facilities for the criminal justice system and schools are two examples of legal mandates.)
  2. Capital investments should emphasize health and safety considerations so that employee and customer safety is not compromised in the course of providing services.
  3. Capital investments should ensure critical space needs of County departments are met so that employees have the workspace to perform their jobs effectively and efficiently and provide excellent customer service.

Projects that did not require funding in FY2007 were postponed for future consideration.

Project Priorities

The annual capital budget provides an estimate of the costs and proposed sources of funding for the projects included in the CIP. In developing MecklenburgCounty’s CIP, it is worth noting that requests for project funding will more often than not exceed available financing. Decisions must be made as to which requests should be funded in FY07 and which requests should be considered in a future capital budget. In order to determine where each request falls, it is good practice to prioritize these project requests.

MecklenburgCounty prioritizes requested CIP projects based on the following objective evaluation criteria.

  • Meets legal mandates
  • Advances the Board’s goals or objectives
  • Removes or reduces hazards
  • Maintains or improves service quality
  • Improves service efficiency
  • Supports economic development
  • Offers convenience to residents
  • Improves quality of life or aesthetic value for residents

Based on the selection criteria, the following nine County projects are recommended:

Projects / Total Funding
  1. Medical Examiner Equipment
/ $ 1,259,000
  1. District Attorney Expansion - Phase I
/ 6,062,000
  1. CountyFiles and Equipment Storage Facility
/ 986,000
  1. Jail Central Intake
/ 1,755,000
  1. Freedom Mall (IST Phase 2 and Real Estate Services)
/ 14,785,000
  1. Hickory Grove Library Relocation
/ 4,207,000
  1. Scalybark Library Relocation
/ 5,565,000
  1. Sharon Road Library Relocation
/ 5,051,000
  1. Freedom Mall – outparcel (e.g., DSSSeniorEnrichmentCenter)
/ 177,000
Total / $ 39,847,000

SchoolBuilding Solutions

In addition to general government needs, the County is also responsible for financing the capital needs of CMS. For FY2007, the SBSC, a special committee composed of a diverse group of citizens, was empowered to review CMS’ capital needs and to recommend a solution to address both the short-term and long-term needs. This capital budget includes the SBSC’s recommendation for using COPs to address the 18 most critical school building needs.

Projects / Funding
  1. Alexander Graham Middle – Phase I
/ $ 9,300,000
  1. Alexander Middle
/ 900,000
  1. Cochrane Middle
/ 17,865,000
  1. North Tryon St./Pavilion Blvd. Area Elementary
/ 2,200,000
  1. Harding High – Phase I
/ 13,274,000
  1. Idlewild Elementary
/ 9,493,000
  1. Mandates/Initiatives Lifecycle
/ 1,000,000
  1. New Bailey Road Area high (Preconstruction)
/ 7,000,000
  1. New Belmeade Road Area Middle (Preconstruction)
/ 4,300,000
  1. New Belmeade Road Elementary
/ 16,500,000
  1. New Bradley Elementary
/ 15,500,000
  1. New Hucks Road Elementary
/ 18,600,000
  1. New Matthews/Mint Hill Area High (Preconstruction)
/ 7,600,000
  1. New Providence Road West Area Elementary
/ 16,500,000
  1. New Ridge Road Area Middle (Preconstruction)
/ 2,000,000
  1. North Mecklenburg High – Phase I
/ 9,300,000
  1. Palisades MS and HS
/ 6,500,000
  1. Sedgefield Middle – Phase I
/ 14,000,000
Total / $ 171,832,000

Capital Budget Summary

Including the CMS projects, the total capital budget FY2006-2008 totals $211.8 million in new funding for 9 County projects and 18 CMS projects. Total funding by type of project is summarized below.

  • Government Facilities$ 17,207,000
  • Court Facilities 6,062,000
  • Law Enforcement Facilities 1,755,000
  • Park and Recreation/Land Acquisition 0
  • Library 14,823,000
  • Charlotte-Mecklenburg Schools171,832,000
  • Total$211,679,000

Source of Funding

To fund these projects, COPs and Paygo capital funding are recommended.

Projects / 2 Year Total / COPS / PAYGO / Total Funding
  1. Medical Examiner Equipment
/ $ 1,259,000 / √ / $ 1,259,000
  1. District Attorney Expansion - Phase I
/ 6,062,000 / √ / 6,062,000
  1. CountyFiles and Equipment Storage Facility
/ 986,000 / √ / 986,000
  1. Jail Central Intake
/ 1,755,000 / √ / 1,755,000
  1. Freedom Mall (IST Phase 2 and Real Estate Services)
/ 14,785,000 / √ / 14,785,000
  1. Hickory Grove Library Relocation
/ 4,207,000 / √ / 4,207,000
  1. Scalybark Library Relocation
/ 5,565,000 / √ / 5,565,000
  1. Sharon Road Library Relocation
/ 5,051,000 / √ / 5,051,000
  1. Freedom Mall outparcel (e.g., DSSSeniorEnrichmentCenter)
/ 177,000 / √ / 177,000
10. CMS Projects[1] / 171,832,000 / √ / 171,832,000
Total / $211,679,000 / $203,195,000 / $8,484,000 / $211,679,000

A Look Ahead to the FY2007-2009 Capital Budget

In the development of the FY2007 capital budget, several projects were not recommended for funding because they did not require funding until FY2008 or beyond. These projects, along with additional school needs, will most likely be considered for the FY2008 capital budget.

Based on the SBSC recommendation, there is the possibility that CMS could ask for a school capital referendum up to $400 million. In addition, if the jail expansion, additional libraries, and court system needs are approved in FY2008, a referendum will likely be needed to fund these projects. While a referendum is not recommended for FY2007 CIP, this recommendation proposes a November 2007 bond referendum for CMS, and consideration for other government projects to be placed on the ballot at that time as well. The Board will receive a formal recommendation on these matters from the CCBAC and the CountyManager at this time next year.

Conclusion

The FY2006-2008 Recommended Capital Budget and FY2006-2016 CIP is based on funding projects that help us make progress towards the 2015 vision for Mecklenburg County and address the most critical needs of CMS. The accompanying Recommended Capital Budget provides supporting documentation for the SBSC’s recommendation and that of the Citizens’ Capital Budget Advisory Committee. While there are a few differences, the CCBAC recommendations and those I propose are, on the whole, supportive of each other. To facilitate this review, as part of this CIP package, a document that summarizes the similarities and differences between the CCBAC/SBSC and my recommendation immediately follows this transmittal letter.

Please let me know if you have any questions.

Sincerely,

Harry L. Jones, Sr.

CountyManager

1

[1]As part of the FY2007 budget process, the County is projected to receive $18 million in State lottery funds. Of this total, $9 million is already obligated for existing CMS debt service incurred on financings issued after January 1, 2003. The remaining $9 million is available for funding new construction or for additional debt service. The SBSC recommends that this $9 million be used to pay off the debt service associated with the $171.8 million in COPs to be issued for CMS. This capital budget supports the SBSC recommendation. However, I also want to acknowledge that this use will consume, some or all the lottery funds, for the next 20 years. Should debt service payments be greater than the lottery funds available, any shortfall will be paid for from County tax revenues.