How to Develop a Capital Facilities Plan

Managing Your UpdatePresented by Leonard Bauer, FAICP forGrowth Management Services and the Public Works Board

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AgendaWhy Plan? What is a Capital Facility?Steps in Developing a CFP Small City CFP TipsConclusionHelpful Resources

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Why Plan?Growth Management Act (GMA) Requirement Several funding agencies require it or give pointsGuides implementation of the communitys visionFramework for decision makers Provides transparency about purchasing decisions to your publicProvides the orderly replacement of capital assetsIt helps AVOID SURPRISES

Some funding agencies require a CFP and others will give points for it.

Framework for decision makers about what to buy, when to buy and how to pay for it. Also, its a mechanism to prioritize capital projects and match projects with existing funding options.

Orderly replacement e.g., pavement management system, sidewalk replacement or gap-filling3

What is Required by GMA?Inventory capital facilitiesForecast of future needs for capital facilitiesProposed location and capacity of expanded or new facilitiesFinancing plan for at least the next 6 yearsRequirement to re-evaluate plan if funding falls short RCW 36.70A.070(3)

RCW 36.70A.070 requires a capital facilities plan element consisting of:(a) An inventory of existing capital facilities owned by public entities, showing the locations and capacities of the capital facilities;(b) a forecast of the future needs for such capital facilities; (c) the proposed locations and capacities of expanded or new capital facilities; (d) at least a six-year plan that will finance such capital facilities within projected funding capacities and clearly identifies sources of public money for such purposes; and (e) a requirement to reassess the land use element if probable funding falls short of meeting existing needs and to ensure that the land use element, capital facilities plan element, and financing plan within the capital facilities plan element are coordinated and consistent. Park and recreation facilities shall be included in the capital facilities plan element.

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What is a Capital Facility?Streets, roads, sidewalks, street and road lighting systems & traffic signalsWater systemsSanitary sewer systemsStorm water facilitiesSolid waste systemsSchoolsPark and recreation facilitiesPolice and fire protection facilitiesRCW 36.70A.030(12)(13)

The RCWs are not specific about what constitutes a capital facility. However, the following public facilities and services are mentioned in several sections of the RCWs, WACs and the REET 2 statute:

Pumps, motors and pipes could be included within each system type.

Many jurisdictions use a minimum dollar figure to establish a threshold for a capital facility

Bottom line: recommend you include a definition in your CFP5

Optional Capital FacilitiesTelecommunication systemsRolling stockPublic BuildingsBridgesAirportsOr any other major long-lasting asset, including land that is provided for public purposes

Each jurisdiction should define capital facilities and clearly identify which capital facilities and public services are necessary to support development. (some funding options, like impact fees, can only be used for capital facilities for new development). Those that are necessary to support development should have an identified level of service (LOS) standard so forecast of needs can be determined.

In addition to including facilities owned by public entities, if there are private companies that provide a public service within your jurisdiction, such as garbage and recycling, you will need to include them as well.

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Steps involved in developing a CFPPut a team togetherInventory assets Revisit goals and determine future needsDetermine financial needsPrioritizeDevelop financing plan to achieve goalsRe-evaluate plan every few years

Well go over each on of these in more detail 7

Key Players in CFP DevelopmentCapital Facilities Planning requires participation from a host of people.

Planner or project managerFinance DepartmentTransportation Planners/EngineersUtilities EngineersSpecial Purpose DistrictsCity/County ManagementCitizensPlanning CommissionElected Officials

You will likely have a smaller staff subgroup of this team that does much of the detail work, but all should eventually be part of the process.8

Examples of Capital AssetsA structure, improvement, piece of equipment, or other major asset having a useful life greater than one five yearsCapital facilities which cannot be paid for out of general fund moniesAnything over a designated amount owned by the jurisdictionCapitalized on the books as an asset

Capital assets could be rolling stock, pump and motors, even computers and office equipment or anything over $500 - $50,000 in value. The determination of what to include should be made individually by each local government.

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Example Inventory

Current Needs - Parks & TrailsFacility Name, DescriptionLocationCapacityPresent ConditionImprovements RequiredProject NeededYear or PriorityCost Est.Milo Schneider Park832 Ocean Shores Bl.71 acfence, lighting, picnic furn., play equip., miscany/all imprvts5$85,000Limpet ParkLimpet and Copalis DrSkate ParkMinard Ave. new in 2010North End Grand Canal ParkJ.K. Lewis/Pt. Brownnew dock, picnic facilitiesEmerson ParkBass Ave./W. Court Lnew vinyl surface for tennis courtNorth Bay ParkDuck Lake Dr/Chance7.1 acfields, fence, ltg., restrooms, shelter, seatingany/all imprvts1$1,129,000

Example developed by Grays Harbor COG for City of Westport

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Inventory Current AssetsFacility Name/Description and LocationCapacity (e.g. 5,000 gallon water tank)Present Condition and Useful Life ExpectancyImprovements/Projects NeededYear(s) Improvements/Projects NeededCost estimate

For Improvements/Projects Needed and Estimated Cost: Ask Public Works Department, engineer or check with suppliers or other local governments

Insurance Policy Coverage: Check to make sure the asset is covered by insurance and/or if you have coverage for something that no longer exists

Location (address or GIS coordinates)

Useful Life Expectancy = life-cycle costs (More on next slide)

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Examples of Life-Cycles Pavement is designed to last 15 to 25 yearsCurbs are designed to last 25 to 35 yearsBridges are designed to last 35 to 50 yearsWater mains can last up to 50 yearsMechanical equipment is designed to last 10 to 15 yearsStreet right of way or parks should last foreverLife cycle of sewage lagoons depends upon type of system, effluent make-up, climate, etc. Ditches can last forever

General rules of thumb assuming regular maintenance. You can set your own replacement schedules important point is to have them set.Eliminate excess right of way or other excess property. Lowers maintenance costs and liability

12Forecast of Future Needs

Need for new facilities and services caused by:Increase population/employment growthGeographic growth (i.e. expanding UGAs)

Look at Comp Plan and system plans for identified projects and add to inventory.

Include projects identified by county, special purpose districts, schools and by regulatory agencies.

Use asset management to plan for system preservation and include capital costs in inventory

For needs resulting from growth, develop LOS standards and add to inventory.

Its important to divide need into the three categories of existing deficiencies, system preservation and needs resulting from growth because certain funding sources can only be used for one or two of these categories.13

Level of Service StandardsLOS refers to minimum capacity for public facilities or service that is planned to be provided per unit of demand or other appropriate measure of need.

Examples: Number of acres of parks per personThe time needed for a fire engine to reach the typical call-out.

Establishing LOS for an area of service directs decision makers and managers to make necessary plans to ensure LOS is met. If set too low, LOS may adversely impact quality of life. Conversely, if set too high, jurisdiction may not be able to afford that level of services.

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Level of Service StandardsExamples of LOS from City of Oak Harbor Capital Improvement Plan, 2012-2018Major and Minor RoadsLOS DHighway SR20LOS EDomestic Water Supply73 gpcdCommercial/Industrial37 gpcdSewer60 gpcdStormwater25 year stormFire Response5 minutes

Transportation LOS has historically been based on a volume/capacity ratio that results in a letter grade (e.g., LOS A is very little volume on a high-capacity roadway, LOS F is congested traffic volume on a street that doesnt have the needed capacity to move the traffic). Some cities and counties are now using a transportation LOS method that also addresses other travel modes, such as walking and biking and transit.

The LOS must, of course, be compared to population projections to assure that the proper ratios can be met. There is an often-difficult balancing to be done as part of this process between the desired LOS and the LOS that can be afforded to be maintained over the planning period.15Forecast of Future Needs

Now that youve calculated the system needs, you can list the projects and programs needed to meet those needs. In some cases those might be able to be met by regulations that require new development to provide the facilities if the need is a result of the new development. For example, constructing street frontage or extending water or sewer lines to the development.

Estimating costs for future projects is an art in itself. Keep in mind costs of inflation between now and when the project will be constructed, as well as the potential bid environment.16

2014201520162017201820196 Yr. Total20 Yr. TotalGeneral Fund

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126103100130151$735$3,327Capital Fund REET505079572730$293$1,085GO BondsOther Debt ProceedsGrants173329$502$5,043Loans20100$120$1,171SEPA Impact FeesPark LevyUnknownFunding ResourcesR Resources

Estimate revenues from each potential source. Obviously more difficult to do beyond first or second year, but essential to have realistic estimates documented for at least the six-year plan horizon. For twenty years, could project revenues based on continuation of 6-year trend, or adjust if know of reasons that support the change.

Based on City of Westport example17

PrioritizeNow that youve identified current and future capital facility needs, estimated costs and potential revenues, you can prioritize projects for funding. This will result in which projects are included in your six-year CIP vs your 20-year CFP.

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Prioritize ProjectsPriorityRating ScoreFacility/ProjectEstimated Total CostUnknown1309Marina Redevelopment$20,884,330$4,553,0002245First Street widening$34,000,0003200Pickle Street sewer line replacement$1,000,000$250,0004155New Central Fire Station$3,253,142$1,500,0005120Local Street Overlays$2,207,482$2,207,482

Many potential rating tools are available, often using a matrix approach that lists projects down one side and the various criteria for rating across the top (e.g., needed for life-safety-health of residents, will result in higher replacement costs later if not done, on-going maintenance costs, etc). This can result in an overall rating score that can compare different types of projects against each other.19Decision Making Tool

Example matrix, giving points to each category:

Does the project satisfy Federal, State, County or City mandates?Does the project satisfy Federal, State, County or City recommendations or pending regulations?Does the project maintain Level of Service standards?Does the project use sustainable practices in construction?Does the project increase infrastructure capacity to meet existing deficiencies to service the existing population?Does the project decrease demand on Operations & Maintenance resources?Does the project eliminate hazards or risks at a neighborhood level through enhanced facilities or restore risk protection at a neighborhood level?

20Decision Making Tool

Give a weight to each category and score accordingly.

21Financing PlanGMA requires that 6-year financing plan be realistic, but local government should develop financing plan that covers full life of plan (7-20 years).

Determining revenues is challengingPrioritizing and timing projects is importantCFP can be updated annually

20-year plan will be high-level estimates at best, both for costs and revenues. However, it can give a broad perspective on whether the overall comprehensive plan is realistic, or whether different policy approaches toward funding capital facilities should be examined (e.g., institute impact fees, different LOS, etc.)

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6-Year Capital Improvement PlanCapital Facilities PlanningCost/Funding Sources - Parks & Trails (costs in thousands)Cost/Funding Sources2014201520162017201820196 Year Total20 Year TotalNorth Way Park$1,477$500$293$2270$16,667Cedar Access Area$140$140$4,121Pickle Boat Access$32$101$22$155$903Rover Dog Park$85$85$1.631Wastewater Trtmt Plant Access$400$400$7,677

Provide at least a six-year plan that will finance such capital facilities. The 20-year Capital Facilities Plan must include a six-year financing plan that will start on the year the Capital Facilities Plan is adopted or updated. This is often referred to as the Capital Improvement Plan or CIP. Heres an example of a six-year plan for Parks and Trails

The 6 year plan is the basis for capital investment decisions by council and intersects with other political decisions.

Its important to consider the long-term maintenance costs for each capital facility, and how those will be paid for. Also, consider energy use and other operating costs (designing energy efficiencies into the project can save significant operating costs over the life of the facility). These can be included in the 20-year total cost estimates.23

Financing Plan (contd)The Growth Management Hearings Board (GMHB) has consistently read RCW 36.70A.070(3)(e) to require that the estimates for revenues meet the estimated expenses for the 20-year planning period, or a reassessment of the land use plan would be required.

Decisions havent specified what level of detail is needed for these estimates. High-level cost and revenue estimates are probably the best you can do, but having those could be very helpful to see the long-term outcomes of current policy decisions and priorities.24

County ConsiderationsCounties responsible for adopting Urban Growth Areas (UGAs)Review and revise Countywide Planning Policies as necessaryUGA expansions must be accompanied by CFP analysis showing that the area can be adequately served at adopted LOSCounties should have policies to address emergenciesUnincorporated UGAs treated same as all UGAsmust show full range of facilities and servicesSpecial purpose districts

Tips to get information from other service providers (may be true for cities as well as counties): Start early give them plenty of time. In some cases they may need to gather the information because they dont actually have it. I recommend discussing with them the previous year. Let them know the type of information you want and why. Remember, they may not have a legal requirement to produce the information like you do, so discuss how your having the CFP may benefit them as providers. For example, if you dont have the information, you have an obligation under GMA to re-examine land use plan. This could result in fewer customers for a rate-based utility.

CFP Guidebook: Chapter 2, Developing and Updating your Inventory Page 2

If they dont have the information, there may be opportunities to help them gather the data or get it into a format that is most useful to you. Offer any assistance you can give. Even sharing the types of data you have can help them organize their data in a way that will be more helpful to you. Check to make sure they are using the same population projections and planning horizons.

25Consistency and Coordination

A key focus of GMA is consistency and coordination between all elements of comp plans.

Capital budget decisions is perhaps the most significant of consistency requirements.Need for capital facilities will be driven primarily by land use element.Early and regular coordination with service providers is invaluable.Gaps in facility coverage must be addressed by counties.

A requirement to reassess the land use element if probable funding falls short of meeting existing needs and to ensure that the land use element, capital facilities plan element, and financing plan within the capital facilities plan element are coordinated and consistent. Park and recreation facilities shall be included in the capital facilities plan element.

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Small City CFP TipsPlanning Commissions Use them!They know the communityThey know the Comprehensive PlanGreat forum for public involvementIntelligent advice for electedsAlready in place and used to linking big ideas

Borrowed from Westport CFP

Pulling together the staff from utilities with the planning commission can help both improve decision-making and stay coordinated.27

ConclusionsStrategic planning for facilities and services is criticalInvest where you want new growth to occurUnderstand how growth drives need for infrastructureNew residences increase tax base and revenues but will increase need for services Consider alternative land use scenarios before expanding UGAsWork collaboratively with service providers to look at long-term needs

Infrastructure is necessary to support new growth, and new growth creates demand for infrastructure. Need to coordinate them.28

Good Examples A Small City Capital Facilities Plan Case Study City of Westport:http://www.newpartners.org/2010/docs/presentations/friday/np10_gibb.pdf

City of Oak Harbor Capital Improvements Plan 2013-2018:http://www.oakharbor.org/uploads/documents/6176adopted_capital_improvements_plan_2013_2018.pdf

City of Walla Walla Capital Facilities Element http://www.wwjcda.org/vertical/sites/%7BA99EFDD8-2880-46D9-8872-33C0125E020B%7D/uploads/%7B4801DFAA-EF9C-46B6-AF14-CB478B106025%7D.PDF

Municipal Research and Services Center - www.mrsc.org

MRSC also has good examples as well as Guidebook (next slide).29CFP Guidebook

http://www.commerce.wa.gov/Services/localgovernment/GrowthManagement/Capital-Facilities/Pages/CapitalFacilitiesPlanningGuidebook.aspx

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Thank youLeonard Bauer, FAICPDeputy Director of Community Planning & DevelopmentCity of Olympialbauer@ci.olympia.wa.us

Joyce Phillips (CFP Guidebook Primary Author)Senior Planner, Growth Management Services(360) 725-3045Joyce.Phillips@commerce.wa.gov

Follow up questions and assistance available from Commerce GMS31MainInstructions HyperlinkDECISION MATRIXMODIFIED:1/11/04 12:34PROGRAM AREAPROJECT NAMEDoes the project satisfy Federal, State, County, or City mandates (e.g., by not performing this project Federal/State money is withheld, laws violated if not followed, or addresses concurrency issues)?Does the project satisfy Federal, State, County, or City recommendations or pending regulations?Does the project maintain Level of Service standards?Does the project use sustainable practices in construction?Does the project increase infrastructure capacity to meet existing deficiencies to service the existing population?Is maintenance more expensive and time consuming than at current level (requires additional resources)?Does the project decrease the demand on Operations & Maintenance resources?Is the project fully funded with outside resources?Is the project funded by a grant with identified local match?Is the project funded with unidentified match or with current rates?Is the project funded with increased rates or no identified source?Is the funding expected the year after the project approved in the CFP?Is the funding expected 2-3 years after the project approved in the CFP?Is the funding expected 4-6 years after the project approved in the CFP?Does the project exceed all environmental compliance requirements?Does the project meet all environmental compliance requirements?Does the project eliminate a risk or hazard to public health and/or safety that endangers the City's population area?Does the project eliminate hazards or risks at a neighborhood level through enhanced facilities or restore risk protection at a neighborhood level?Does the project preserve or extend the life of an existing asset?Does the project increase infrastructure capacity to meet future growth needs?Does the project increase or generate additional revenue due to the efficiency of operation and maintenance?Is the total capital cost of the project so high that it requires, on a temporary basis, the hiring of additional staff or significantly increases overhead costs beyond current levels?Is the total capital cost of the project within the normal range for CFP projects (will not require the hiring of additional staff or increased overhead costs)?Does the project affect all customers within the City by changing the way the City delivers services or does business (many external stakeholders)?Does the project affect all customers within a recognized neighborhood or area (only the PIAs within that neighborhood or area are affected by the change in the way the City delivers services or does business?)Will the project attract new businesses or help retain existing businesses?Does the project use innovative solutions, approaches, or use technology in creative ways?Will failure to do the project or delaying the project have major impacts on other projects or programs?1Transportation4th Avenue connectorxxx2TransportationMain Street/5th Avenue intersection realignmentxx345678910111213141516171819202122232425262728293031323334353637383940414243444546474849505152535455565758596061626364656667686970717273747576777879808182838485868788899091929394959697

BackgroundInstructions HyperlinkDECISION MATRIXDECISION MATRIXCRITERIA MAXIMUM POINTS-->2015101015515201510515105151020101051551020151510150PROGRAM AREAPROJECT NAMEDoes the project satisfy Federal, State, County, or City mandates (e.g., by not performing this project Federal/State money is withheld, laws violated if not followed, or addresses concurrency issues)?Does the project satisfy Federal, State, County, or City recommendations or pending regulations?Does the project maintain Level of Service standards?Does the project use sustainable practices in construction?Does the project increase infrastructure capacity to meet existing deficiencies to service the existing population?Is maintenance more expensive and time consuming than at current level (requires additional resources)?Does the project decrease the demand on Operations & Maintenance resources?Is the project fully funded with outside resources?Is the project funded by a grant with identified local match?Is the project funded with unidentified match or with current rates?Is the project funded with increased rates or no identified source?Is the funding expected the year after the project approved in the CFP?Is the funding expected 2-3 years after the project approved in the CFP?Is the funding expected 4-6 years after the project approved in the CFP?Does the project exceed all environmental compliance requirements?Does the project meet all environmental compliance requirements?Does the project eliminate a risk or hazard to public health and/or safety that endangers the City's population area?Does the project eliminate hazards or risks at a neighborhood level through enhanced facilities or restore risk protection at a neighborhood level?Does the project preserve or extend the life of an existing asset?Does the project increase infrastructure capacity to meet future growth needs?Does the project increase or generate additional revenue due to the efficiency of operation and maintenance?Is the total capital cost of the project so high that it requires, on a temporary basis, the hiring of additional staff or significantly increases overhead costs beyond current levels?Is the total capital cost of the project within the normal range for CFP projects (will not require the hiring of additional staff or increased overhead costs)?Does the project affect all customers within the City by changing the way the City delivers services or does business (many external stakeholders)?Does the project affect all customers within a recognized neighborhood or area (only the PIAs within that neighborhood or area are affected by the change in the way the City delivers services or does business?)Will the project attract new businesses or help retain existing businesses?Does the project use innovative solutions, approaches, or use technology in creative ways?Will failure to do the project or delaying the project have major impacts on other projects or programs?00000000000000000000000TOTAL SCORE BY PROJECT1Transportation4th Avenue connector200100150000000000000000000000000000000000000000000000452TransportationMain Street/5th Avenue intersection realignment001001500000000000000000000000000000000000000000000002530000000000000000000000000000000000000000000000000000004000000000000000000000000000000000000000000000000000000500000000000000000000000000000000000000000000000000000060000000000000000000000000000000000000000000000000000007000000000000000000000000000000000000000000000000000000800000000000000000000000000000000000000000000000000000090000000000000000000000000000000000000000000000000000001000000000000000000000000000000000000000000000000000000011000000000000000000000000000000000000000000000000000000120000000000000000000000000000000000000000000000000000001300000000000000000000000000000000000000000000000000000014000000000000000000000000000000000000000000000000000000150000000000000000000000000000000000000000000000000000001600000000000000000000000000000000000000000000000000000017000000000000000000000000000000000000000000000000000000180000000000000000000000000000000000000000000000000000001900000000000000000000000000000000000000000000000000000020000000000000000000000000000000000000000000000000000000210000000000000000000000000000000000000000000000000000002200000000000000000000000000000000000000000000000000000023000000000000000000000000000000000000000000000000000000240000000000000000000000000000000000000000000000000000002500000000000000000000000000000000000000000000000000000026000000000000000000000000000000000000000000000000000000270000000000000000000000000000000000000000000000000000002800000000000000000000000000000000000000000000000000000029000000000000000000000000000000000000000000000000000000300000000000000000000000000000000000000000000000000000003100000000000000000000000000000000000000000000000000000032000000000000000000000000000000000000000000000000000000330000000000000000000000000000000000000000000000000000003400000000000000000000000000000000000000000000000000000035000000000000000000000000000000000000000000000000000000360000000000000000000000000000000000000000000000000000003700000000000000000000000000000000000000000000000000000038000000000000000000000000000000000000000000000000000000390000000000000000000000000000000000000000000000000000004000000000000000000000000000000000000000000000000000000041000000000000000000000000000000000000000000000000000000420000000000000000000000000000000000000000000000000000004300000000000000000000000000000000000000000000000000000044000000000000000000000000000000000000000000000000000000450000000000000000000000000000000000000000000000000000004600000000000000000000000000000000000000000000000000000047000000000000000000000000000000000000000000000000000000480000000000000000000000000000000000000000000000000000004900000000000000000000000000000000000000000000000000000050000000000000000000000000000000000000000000000000000000510000000000000000000000000000000000000000000000000000005200000000000000000000000000000000000000000000000000000053000000000000000000000000000000000000000000000000000000540000000000000000000000000000000000000000000000000000005500000000000000000000000000000000000000000000000000000056000000000000000000000000000000000000000000000000000000570000000000000000000000000000000000000000000000000000005800000000000000000000000000000000000000000000000000000059000000000000000000000000000000000000000000000000000000600000000000000000000000000000000000000000000000000000006100000000000000000000000000000000000000000000000000000062000000000000000000000000000000000000000000000000000000630000000000000000000000000000000000000000000000000000006400000000000000000000000000000000000000000000000000000065000000000000000000000000000000000000000000000000000000660000000000000000000000000000000000000000000000000000006700000000000000000000000000000000000000000000000000000068000000000000000000000000000000000000000000000000000000690000000000000000000000000000000000000000000000000000007000000000000000000000000000000000000000000000000000000071000000000000000000000000000000000000000000000000000000720000000000000000000000000000000000000000000000000000007300000000000000000000000000000000000000000000000000000074000000000000000000000000000000000000000000000000000000750000000000000000000000000000000000000000000000000000007600000000000000000000000000000000000000000000000000000077000000000000000000000000000000000000000000000000000000780000000000000000000000000000000000000000000000000000007900000000000000000000000000000000000000000000000000000080000000000000000000000000000000000000000000000000000000810000000000000000000000000000000000000000000000000000008200000000000000000000000000000000000000000000000000000083000000000000000000000000000000000000000000000000000000840000000000000000000000000000000000000000000000000000008500000000000000000000000000000000000000000000000000000086000000000000000000000000000000000000000000000000000000870000000000000000000000000000000000000000000000000000008800000000000000000000000000000000000000000000000000000089000000000000000000000000000000000000000000000000000000900000000000000000000000000000000000000000000000000000009100000000000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Sheet1Instructions HyperlinkDECISION MATRIXDECISION MATRIXCRITERIA MAXIMUM POINTS-->20151010150PROGRAM AREAPROJECT NAMEDoes the project satisfy Federal, State, County, or City mandates (e.g., by not performing this project Federal/State money is withheld, laws violated if not followed, or addresses concurrency issues)?Does the project satisfy Federal, State, County, or City recommendations or pending regulations?Does the project maintain Level of Service standards?Does the project use sustainable practices in construction?Does the project increase infrastructure capacity to meet existing deficiencies to service the existing population?TOTAL SCORE BY PROJECT1Transportation4th Avenue connector20010015452TransportationMain Street/5th Avenue intersection realignment001001525

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