Yup, budget time!
May 5, 2014
To: Department and Division Heads
From: Mayor Paul R. Soglin
Subject: 2015 Capital Budget Target
Successive years of tight budgets were difficult, forcing us to find the optimal balance between necessary investments in aging infrastructure and support for new projects which ensure the quality of life that makes this city great.
I appreciate the efforts you made to carefully balance competing priorities within your agency budgets. Due to our ongoing efforts, we made progress on controlling the capital budget over the past three years, but there are still challenges. As the attached chart shows, while the 2011 forecast is much improved, growth of the debt service from capital projects is expected to affect the operating budget in future years.
Fulfilling our important priorities will require careful planning. Toward that end, you should adhere to the following policies and targets in developing the proposed 2015 capital budget for your agency:
• Limit the overall general obligation and revenue bonding authority for your agency to the amounts included in the capital improvement plan (CIP) adopted as part of the 2014 capital budget. Seek to remove projects or reduce anticipated costs based on updated information.
• Provide information on new projects not currently in the capital improvement plan as a supplemental request, and do not add these projects to the CIP at this time. This approach will allow these projects to be more carefully reviewed.
• Review projects scheduled for 2015 in the current capital improvement program, and seek to appropriately allocate funding to the years the costs will realistically be incurred. Projects are often implemented over multiple years due to timing of site acquisition, planning and design considerations, regulatory approvals, and construction timetables.
• Submit project reduction plans that total 10% of 2015 general obligation bonding amounts included in the 2014 adopted CIP. These plans should also include reductions equal to 10% of the 2014 adopted CIP amounts for 2016 through 2019.
Projects deferred from one year to another within the six-year period of the CIP should not be included in the reduction plan. This reduction plan requirement also applies to Water Utility and Sewer Utility revenue bond amounts in the CIP. Reduction plans should describe the implications of the proposed reductions.
I look forward to working with you and the Finance Department in the coming weeks on this important task.
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