Capital Improvement Program
Have you noticed construction in a street or park in your neighborhood? Mostly during the summer and fall months, the City undertakes numerous improvements and maintenance projects throughout the Island.
Click here to view the Capital Improvement Program section of the budget.
Click here to view CIP Projects underway.
What is the Capital Improvement Program (CIP)?
The Capital Improvement Program encompasses projects that maintain or improve the City’s infrastructure. This includes roads, parks, trails, open space, storm drainage, sewer and water systems, buildings, technology and equipment.
How is the program funded?
Real Estate Excise Tax (REET) is the 0.5% tax paid by the seller in property transactions and is the largest revenue source for the Capital Improvement Fund (which pays for reinvestment in City buildings, parks, and open space). REET also provides more than half of the funding to the Street Fund. State law restricts the use of REET for specific capital purposes. REET-1 (the 1st quarter of 1% of the sales price) may be used for streets, parks, facilities or utilities. REET-2 (the 2nd quarter of 1% of the sales price) may be used for streets, parks, or utilities, but may not be used for facilities. Neither REET-1 or REET-2 may be used for equipment or technology.
Other revenue sources for CIP projects include fuel taxes, utility rates, the general fund (for general government equipment and technology, criminal justice funds and department fees). Private contributions are occasionally used to pay for capital improvements. One example is improvements made to the Thrift Shop building are paid for from Thrift Shop donations/sales. Grants are sought to pay for portions of projects when appropriate.
Most revenues for capital projects come with restrictions. Utility rates may only be used for the projects of the respective utility, fuel taxes may only be used for street and trail projects, and real estate excise taxes (REET) are reserved for capital projects to help develop a community’s public infrastructure (e.g., parks, open space and streets). The City’s capital financing strategy is to use these restricted revenues to “pay as you go” for needed improvements.
How are CIP projects selected?
Council and staff have been discussing the expenditure building blocks for the upcoming CIP for several months. Each biennium, Council provides direction via its annual retreat discussions and various management and budget policies. Adoption of comprehensive planning documents, such as the Transportation Improvement Plan (TIP) adopted each year, the Water System Plan, the General Sewer Plan, and the Open Space Vegetation Plan give more specific project direction. In the case of the TIP the Council actually approves the street and other related projects which are then simply inserted into the capital budget document. The Utility Board also reviews all capital projects for the three City utilities: water, sewer and stormwater.
