Powell City Council adopted a resolution Tuesday establishing a Capital Improvement Plan (CIP) funding policy for the city. The policy establishes financial guidelines for the development of the city’s five-year CIP, including defining the contributions of the general fund towards the CIP through a pair of resource allocations.
Under the new policy, 20% of the city’s prior-year municipal income tax revenue will be made available to fund capital improvements. According to a memo sent to council members by City Manager Andrew White, “Funds will transfer from the General Fund to the Capital Improvement Fund and be appropriated to the Capital Improvement Fund as approved by council.”
In addition to CIP allocation, the memo stated “a discretionary 5% of the city’s prior-year municipal income tax revenue will be available to fund the (Community Improvement Corporation) or to fund capital improvements.”
Documents for the policy stated, “This document shall be used as a tool to ensure the city’s long and short-term capital investments are made in the context of careful consideration of the needs and the resources available to fund all projects. The proposed CIP Funding Policy will provide assurance the city can meet both debt service obligations and all other obligations competing for the available resources. This policy’s objective is to complete all necessary capital improvements responsibly while maintaining financial flexibility to adapt to unexpected changes without service disruption.”
While addressing council during the meeting, White said it is important to note that being able to allocate the funds towards capital improvement projects wouldn’t be possible if not for the income tax restructuring that was approved by residents last year and went into effect on Jan. 1.
Powell Finance Director Rosa Ocheltree estimated the city will have $8.4 million in funding available for capital improvements in the first year with the addition of the 20% allocated through the adopted policy.
Councilwoman Heather Karr said during the meeting, “Based on our policy discussion with the Finance Committee, I know I personally feel — and I think the committee did, too — that it’s important that we set these funds aside to show residents our commitment to the CIP program. That was our primary discussion.”
Councilman Frank Bertone said of the policy’s impact, “We’re making estimates. We have a feel for what’s going to happen and transpire through withholdings, etc. It gives us kind of a guideline or some rails to run down with this conversation. … What we get in terms of a number this year and how we set that process in motion going forward for the next five years, it’s not static, but it at least gives us a solid rail.
“For years we’ve had a similar conversation, ‘Well let’s hope we have some money for this. Let’s pick the one project we can do.’ We’re in a far different conversation than we’ve been in years past, so for us as a body, it’s going to be a little growth opportunity for us as well …”
Bertone went on to say that the 5% allocation to expand the Community Improvement Corporation program, which he said is currently used in a relatively small fashion, is “instrumental for this city to grow.”
“We don’t want to be coming back to the residents for money,” Bertone said. “That’s not our drive. We hadn’t done it for 31 years, we were successful last year. But to the extent where we can manage those funds in a much more judicious fashion, as we have historically, and continue to do so, now they can see and experience the return on investment that we’ve all been striving for as well. We want to see this thing hit the ground running, but we need to get to this conversation (tonight) in order to get to the next one, which is the list (of projects.)”
With the policy approved, and more structured funding now in place, White said the next steps will be to formulate a list of capital improvement projects desired in the city before deciding which of them to prioritize in the years to come.
Reach Dillon Davis at 740-413-0904. Follow him on Twitter @DillonDavis56.