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HomeMy WebLinkAboutR - 2022-17- Resolutions - Establishing A Policy for Capital Improvement R - 2022 - 17 southburlington VERMONT RESOLUTION ESTABLISHING A POLICY FOR CAPITAL IMPROVEMENT PLAN (CIP)YEAR-TO-YEAR ALLOCATION OF UNEXPENDED FUNDS AND AMENDING THE RESOLUTION ESTABLISHING A RESERVE FUND FOR THE CITY OF SOUTH BURLINGTON CAPITAL IMPROVEMENT PLAN(CIP) WHEREAS,the City Charter, section 13-310 (7) states, "The City Council and the school board, by their own actions, may establish reserve funds to pay for public improvements,replacement of equipment, and planned or unplanned operating expenditures. Monies to be deposited in any fund shall be included in a city or school district budget and shall not be excluded in calculating the net cost of operation pursuant to subsection 1309(a) of this chapter. Reserve funds shall be kept in separate accounts and invested in the same manner as other public funds. The City Council and the school board may, from time to time, expend monies in those funds for purposes for which they were established without voter approval."; and, WHEREAS,the purpose of a Capital Improvement Plan is to: a) to provide a multi-year financial plan for maintenance, replacement, and construction or acquisition of capital assets; b) to serve as a fiscal tool to prepare for large expenditures and create tax rate consistency from year to year; c) to plan for and develop facilities that best meet the needs of the community consistent with the City's fiscal capacity and the Comprehensive Plan; and d) to meet statutory requirements related to Impact Fees, Capital Improvement Planning, and Budgeting; and, WHEREAS,under 24 V.S.A. §§4430,and the City's Capital Program and Budget Policy(adopted June 18, 2012) a Capital Expenditure is defined as any expenditure for land, land improvements, infrastructure, buildings, building improvements, vehicles, or equipment costing more than $10,000, this includes, costs related to project pre-development such as studies, surveys, concept plans,designs,preliminary engineering, and engineering are to be included as capital expenditures as well as all expenditures related to all steps in the construction of projects approved in the annual CIP. Yearly and more frequent maintenance costs of capital infrastructure are operational and not capital expenditures; and, WHEREAS, a CIP policy is needed to meet the intended goals of the CIP and formalize how budgeted and unspent CIP funds are managed across all City special funds including its enterprise funds; and, WHEREAS, a General Fund Reserve Fund is needed to meet the CIP goals of minimizing large fluctuations in the tax rate and reduce the need for incurring additional debt; and, WHEREAS, on May 6th, 2013, the City Council established a CIP Reserve Fund for the above referenced purposes which has thus far been utilized only for the City Center projects; and, WHEREAS,it remains in the best long-term interests of the community to utilize a General Fund CIP Reserve Fund for all purposes for which it was established, with updated amendments to its terms to clarify its purpose and function. NOW THEREFORE BE IT RESOLVED that the City Council hereby formally makes it the policy of the City, that across all enterprise and special funds, any unexpended annual funds allocated in the City's approved CIP, shall remain allocated and set-aside for that purpose in future years according to the reserve or fund balance terms of those funds; and, NOW THEREFORE BE IT FURTHER RESOLVED that the City Council hereby re-adopts and amends its Capital Improvement Plan Reserve Fund for the purpose of depositing: any year- end unexpended general fund dollars from voter-approved Capital Improvement Plan Projects; project-specific multi-year General Fund allocations to the Reserve Fund, such as the City Center reserve; and, any City Council-approved General Fund, Fund Balance transfers as the Council,by majority vote, determines to be in the best interests of the City; and, NOW THEREFORE BE IT FURTHER RESOLVED that all money placed in this Reserve Fund shall only be disbursed for the expenditures identified in the City's approved CIP, and as defined under the City's Capital Program and Budget Policy(adopted June 18,2012),or thereafter amended. In the event any CIP item's costs are lower than budgeted, the balance shall remain in the Reserve Fund as an unallocated reserve to be used for the purpose of covering unanticipated cost overages for other CIP items. The reallocation of unallocated funds in the Reserve Fund to support unanticipated CIP item overages shall be at the discretion of the City Manager. At the close of the Fiscal Year,any unallocated fund balance that exceeds 20%of total allocated funds in the Reserve Fund, shall be transferred to City's General Fund Balance. In the event a planned CIP project is cancelled, the City Council may, at any time by majority vote,re-allocate the balance of funds designated for that project to other projects in the approved CIP. All expenditures made from this Reserve Fund will be done in a manner consistent with the Council's Accounts Payable policy and bi-weekly Warrant process done with the approval of a majority of the City Council at an officially warned meeting and recorded in the minutes. [SIGNATURE PAGE TO FOLLOW] Dated at South Burlington, Vermont this /6' day of August,2022. •..14AkideLei- /S/ Meaghan Emery Helen Riehle, Chair Meaghan Emery,Vice Chair Tim Barritt, Clerk Thomas Chittenden Matt Cota