HomeMy WebLinkAboutCouncil Provided Information - 7/8/2025 (4)CITY COUNCIL OF SALT LAKE CITY
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COUNCIL STAFF REPORT
CITY COUNCIL of SALT LAKE CITY
tinyurl.com/SLCFY26
TO:City Council Members
FROM: Kate Werrett, Budget & Policy Analyst
DATE:July 8, 2025
RE:FY2026 Capital Improvement Program (CIP)
CIP BUDGET BOOK PAGES:
-5-13: Proposed projects summary table &
funding sources
-14-15: Lists projects not recommended for funding
-19-24: Identifies existing bonds paid from CIP & other ongoing obligations
-27-58: Recommended General Fund CIP projects details
-61-128: Enterprise fund (Airport, Golf, Public Utilities, and CRA) capital project details
NEW INFORMATION
At the July 1 and July 8 briefings, the Council may wish to identify any priority projects that do not have funding
recommendations or where additional funding is proposed, and any project-specific questions. Responsive
information and funding options may be gathered so the Council could balance the CIP project-specific budgets
on August 12 or 19. As part of the annual budget adoption vote on June 10, the Council made this change to the
Mayor’s Recommended Budget for FY2026 CIP:
- Increased the recaptured funds from completed projects and unfinished projects older than
three years by an additional $704,490. The Administration suggested using half of the additional
recapture ($352,245) for Public Lands capital maintenance in addition to the already recommended
$195,573 and applying the remaining $352,245 towards CIP Project #5, Street Reconstruction 2026,
which increases the total funding recommendation to $4,742,921. By a straw poll at the June 5th work
session, the Council agreed to the Public Lands capital maintenance increase and expressed tentative
agreement with applying the remaining $352,245 towards CIP Project #5.
Two Additional changes are proposed to the FY2026 CIP. To allow the Administration to move forward with
their projects and reflect corrected Funding Log details, the Administration proposes that the Council adopt
these two corrections at the July 8th meeting. All other CIP funding will be discussed at the briefings as
scheduled and approved at the August 19th Council Meeting.
-CPTED (Crime Prevention Through Environmental Design) Lighting Transfer: Within the
Non-Departmental section of the Mayor’s Recommended Budget, a proposed $300,000 transfer to CIP
was included for CPTED lighting to add lighting along the Jordan River trail. This transfer was not
included in the Key Changes document or the CIP Funding Log. While the Key Changes document will
need to be updated with a budget amendment, Council may approve the $300,000 CEPTED funding
request at their July 8 Council Meeting.
Project Timeline:
Budget Hearings: May 20 & June 3, 2025
CIP Public Hearing: July 8, 2025
1st Briefing: June 5, 2025
2nd Briefing: July 1, 2025
3rd Briefing: July 8, 2025
4th Briefing: August 12, 2025
Potential Adoption Vote: August 19, 2025
Note: The Council approves debt service and overall
CIP funding in June with the annual budget. Project
specific funding is approved later by September 1.
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-Removal of Debt Service Funding for 2nd Tranche of Public Lands Bond: The Administration
found that the debt service amount for the not yet issued 2nd Public Lands bond tranche was included
in the FY2026 Key Changes as a revenue source, although it should not have been included because the
Council has not yet approved moving ahead with the second issuance. Due to this error, the funding was
also added to the CIP book. To amend, the CIP General Fund transfer and debt service payments will
need to be reduced by $2,827,645. The CIP log and the CIP book need this debt service removed before
CIP adoption. NOTE: GO bonds are not paid from CIP because they are funded through a separate,
dedicated voter-approved property tax, and are therefore tracked/accounted for in a separate fund.
CIP Debt Load Projections Chart
The Administration provided the following chart to illustrate the ratio of ongoing commitments to available
funding with projections through FY2029. Pay-as-you-go projects reflect new capital projects. The chart
includes debt load projections. An important caveat to note is that the chart assumes that for future years, 6.5-
6.7% of ongoing General Fund revenues are transferred into CIP. The FY2023 budget achieved the 9% transfer
goal; however, the City has typically been closer to 7% over the past 15 years. For FY2026, the General Fund
transfer to CIP, including Funding our Future dollars, was 6.2%. Given the evolution of CIP funding sources,
Council Staff is working with the Administration to determine what metric makes most sense to determine if the
appropriate level of CIP investment, with respect to the overall City budget, is occurring.
Most of these commitments are debt payments on existing bonds. Other obligations include ESCO debt
payments, the Crime Lab lease, capital replacement funding for parks and facilities, contributions to the CIP cost
overrun account, and the 1.5% for art fund. It also includes larger ongoing project funding outside of the
competitive CIP process, such as new urban trail capital maintenance, new planning and design funding,
expanded public lands capital maintenance, and expanded vacant and leased city-owned property maintenance.
The CIP Budget Book includes an overview and details on each ongoing commitment. GO bonds are not paid
from CIP because they are funded through a separate, dedicated voter-approved property tax increase.
Information below was provided to the Council at earlier briefings
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ISSUE AT-A-GLANCE
Each year, the Council appropriates overall funding for the Capital Improvement Program (CIP) and approves
debt payments and ongoing obligations as part of the annual budget in June. Over the summer, the Council
reviews individual projects and per state law must approve project-specific funding by September 1. CIP is an
open and competitive process where residents, local organizations, and City departments submit project
applications. The Community Development and Capital Improvement Program (CDCIP) resident advisory board
reviews the applications in public meetings and makes funding recommendations to the Mayor and Council. The
Mayor provides a second set of funding recommendations. The Council considers both funding
recommendations and ultimately decides on project-specific funding. Funding for capital improvements
sometimes occurs in mid-year budget amendments, but the annual CIP process is the Council’s largest annual
opportunity to fund large public construction projects. This report provides an overview of the proposed General
Fund CIP budget for FY2026 and policy questions.
The total FY2026 CIP budget is $66 million. This is $7.8 million (19%) more than last year.
The combined $27.8 million from the General Fund and Funding Our Future transfer to CIP (first and third
rows in the table below) is 10.5% more than the FY2025 CIP transfer. Given the evolution of CIP funding
sources, Council Staff is working with the Administration to determine what metric makes most sense to
determine if the appropriate level of CIP investment, with respect to the overall City budget, is occurring. A
future briefing will provide updates on a meaningful metric that acknowledges the multiple CIP funding sources.
A funding log summarizing the CDCIP resident advisory board and mayoral funding recommendations is
available as Attachment 2. The table below details funding sources for CIP by fiscal year. See Attachment 4 for
an overview of the major CIP Funding Sources. Other highlights include:
Comparison of CIP Funding Sources by Fiscal Year
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$99 Thousand Increase in General Funds—The General Fund transfer is the most flexible funding source
available for new projects. The Council has restricted Funding Our Future to five critical need areas, which is not
part of this amount.
$6.25 Million Increase in Class C (Gas Tax) – A significant portion of this increase is due to the Finance
Department conducting a reconciliation of the existing Class C CIP project funds. The majority of the additional
$6.25 million was identified in the Class C cash reserves/fund balance and is a one-time increase to CIP funding.
$5.9 Million Increase in Impact Fees—The proposed CIP budget includes $9.7 million in street and park
impact fees.
$3.6 Million Recaptured Funds from Completed Projects and Unfinished Projects Older than
Three Years
Administration completed a review of all CIP projects and recaptured $2.9 million in
prior CIP funding to rescope for other projects. These funds come from completed projects, dormant CIP
projects older than three years with budgetary balances, and earthquake repair insurance refunds for public
buildings. See Attachment 5 for the Administration’s review of CIP funding usage. After finalizing the CDCIP
and Mayor CIP recommendations, an additional $704,490 was recaptured. The Administration suggests using
half of the additional recapture ($352,245) for Public Lands capital maintenance in addition to the already
recommended $195,573 and applying the remaining $352,245 towards CIP Project #5, Street Reconstruction
2026, which increases the total funding recommendation to $4,742,921.
$2.6 Million Increase in County 1/4¢ and 5th 5th Sales Tax for Transportation – The County 1/4¢ and
5th 5th Sales Tax are combined due to their shared eligibility requirements. These funds are available for
transportation projects per state law. $2.5 million of the FY26 increase is from the existing County 1/4¢ fund
balance. Recently, the County approved a 5th 5th sales tax which goes into effect July 1, 2025, and is projected to
provide an ongoing $600,000 for CIP projects.
$13 Million Debt and Lease Payments – $13,077,844 of the ongoing General Fund transfer to CIP
(including Funding Our Future dollars) is needed to cover debt and rental payments.
Differences between CDCIP Board and Mayoral Funding Recommendations
Mayor recommends additional funding to projects recommended by the CDCIP Board
Mayor recommends funding capital maintenance projects without CDCIP Board funding recommendations
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POLICY QUESTIONS
1.Differences between CDCIP Board and Mayoral Funding Recommendations – The Council
may wish to ask the Administration about the different funding recommendations from the CDCIP
residents advisory board and the Mayor as summarized in the two tables earlier in this report.
2.Resources to Support Constituent Applications – The Council may wish to discuss with the
Administration the potential of a constituent-specific CIP project funding allotment rather than
grouping them with the city department applications. At the May 20 Public Hearing, some constituents
and a CDCIP Board Member requested some kind of division between the funding to allow for more
constituent applications to be supported.
3.Project #57: Civic Campus and Green Loop Implementation – The Council may wish to have a
follow-up briefing to more fully understand the project deliverables of the $2.9 million park impact fee
allocation for the Green Loop and Civic Campus, including the estimated timeframe.
4.Capital Asset Plan Status Update – The Council may wish to request a briefing for an update on the
City’s Capital Asset Plan. The FY2024 non-departmental budget transferred $350,000 to IMS for
Capital Asset Planning software to facilitate this effort. See Attachment 6 for the Council’s potential
policy goals, metrics, and requests from a briefing in 2019.
5.Inflationary Price Increases and the Cost Overrun Account – The Council may wish to ask the
Administration how inflationary price increases have impacted departments utilizing the CIP Cost
Overrun Account, and if additional funding may be needed to avoid project scope reductions. The
Council could also re-evaluate the funding level for the account and/or the formula for the maximum
amounts a project may receive, which hasn’t been updated since 2004 (see section 11 of Attachment 1).
ADDITIONAL & BACKGROUND INFORMATION
Definition of a CIP Project
As defined in the Council-adopted 2017 Capital and Debt Management Guiding Policies Resolution (Attachment
1), a CIP project must “involve the construction, purchase or renovation of buildings, parks, streets or other
physical structures, … have a useful life of five or more years, … have a cost of $50,000 or more, … or significant
functionality can be demonstrated…such as software.” The Council also set a three-year spending deadline as
part of the guiding policies. CIP accounts older than three years are periodically reviewed for recapture from
projects that finished under budget or were not pursued.
Comparison of CIP Project Requests by Year and Type
This chart was prepared by Council staff as a comparison of total project requests on the CIP funding log since
FY2017, and whether the application is from a constituent or internal to a City department. The FY2026 CIP
cycle has 60 project requests. FY2021 had the fewest with 19 project requests only from departments (it was
intentionally an “abbreviated CIP cycle” per the Administration at the time). FY2023 had the most with 90
project requests.
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Note: this chart only includes funding requested in the competitive portion of CIP so debt service and ongoing
obligations are generally not reflected in the above figures
Cost Overrun Account
The FY2026 CIP budget includes $223,171 of additional Cost Overrun funding. The Council established this
account for projects that experience costs slightly higher than budgeted. A formula determines how much
additional funding may be pulled from the Cost Overrun account depending on the total Council-approved
budget. See Section 11 of Attachment 1 for the formula. This process allows the Administration to add funding to
a project without returning to the Council in a budget amendment. A written notification to the Council on uses
is required. The purpose is to allow projects to proceed with construction instead of delaying projects until the
Council can act on a budget amendment which typically takes a few months.
1.5% for New Art and Maintenance of Existing Artworks
The annual report required by ordinance regarding the maintenance of City artworks in the past fiscal year and
planned for the next year will be transmitted to the Council in the autumn. This timing is after the annual budget
is adopted so the amount of funding available in CIP overall allows the 1.5% to be calculated and inform how
those funds would be used.
Salt Lake City Code, Chapter 2.30, established the Percent for Art Fund and designates roles for the Art Design
Board and Arts Council related to artist selection, project review and placement. The Public Art Program also
oversees projects with funding from the Airport and CRA. In April 2021, the Council amended Chapter 2.30 to
make several changes to the ordinance including an increase from 1% to 1.5% of ongoing unrestricted CIP
funding for art. There is no ceiling so the Council could approve funding for art above 1.5%. The ordinance also
sets a range of 10%-20% for how much of the resulting annual funding is allocated to maintenance (as opposed
to new artworks). This section of the ordinance also states that before funds are deposited into the separate
public art maintenance fund a report from the Administration will be provided to the Council identifying works
of art that require maintenance and estimated costs. This created the first ongoing dedicated funding for
conservation and maintenance of the City’s public art collection consisting of over 270 pieces and counting.
ATTACHMENTS
1. Capital and Debt Management Guiding Policies Resolution 29 of 2017
2. FY2026 CIP Funding Log
3. Mayor's Recommended CIP Book FY2026
4. Overview of CIP Major Funding Sources
5. Status of Approved CIP Projects and Recapture Details for Projects Older than Three Years
6. Capital Asset Plan (CAP) Council Requests from January 2019
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ACRONYMS
CAP – Capital Asset Plan (a five-year CIP plan)
CDBG – Community Development Block Grants
CDCIP – Community Development and Capital Improvement Program Advisory Board
CIP – Capital Improvement Program
CPTED – Crime Prevention Through Environmental Design
ESCO – Energy Service Company
FY – Fiscal Year
GO Bond – General Obligation Bond