Proposal for a Comprehensive Capital Improvements Program Presentation to Joint Council Committee December 7, 2016 Proposed General Obligation Bond Program • Repair, replace, rebuild and maintain existing infrastructure • Proposed $800M bond issue (estimated $40M in bonds per year for 20 years) • Proposed for citywide vote on April 4, 2017 • Election would include bond approval and renewal of CIP sales tax • 57.1% approval required for bonds Debt Framework City’s Debt Program Governmental Activities Debt General Obligation Appropriation Backed Business Type Activities Debt Aviation Water Sewer Total Outstanding Debt - $2.57 billion Governmental Activities, $1,595,558 As of 4/30/16, in thousands Business Type Activities, $981,034 Debt Position as of 4/30/16 Governmental Activities - $1,595 million General Obligation - $347 million Limited Obligation - $1,085 million Leasehold Revenue - $101 million Lease Purchase - $62 million Business Type Activities - $981 million Airport - $195 million Water - $352 million Sewer - $431 million Stormwater - $2 million Total - $2.576 billion Credit Rating General Obligation Credit Appropriation Backed Credit S&P Moody's S&P Moody's AAA Aaa AAA Aaa AA+ AA AA- Aa1 Aa2 Aa3 AA+ AA AA- Aa1 Aa2 Aa3 A+ A A- A1 A2 A3 A+ A A- A1 A2 A3 BBB+ BBB BBB- Baa1 Baa2 Baa3 BBB+ BBB BBB- Baa1 Baa2 Baa3 Credit Rating • Both rating agencies use a rating methodology to establish a “grid-indicated” rating by weighting the various objective (quantitative) factors that are included in the analysis. • The grid-indicated rating is then adjusted by more subjective (qualitative) factors. Rating Factor Economy/Tax Base Finances Management Debt/Contingent Liabilities Institutional Framework Total Weight Standard & Poor's 30% 30% 20% 10% 10% 100% Moody's 30% 30% 20% 20% 0% 100% Debt Policy • Committee Substitute for Ordinance No. 160883 • Tax-exempt vs. taxable • Public vs. private – use, payment, security • Tax-exempt is cheaper • Term for GO bonds • 20 year limit per state statute • Must be less than or equal to useful life of asset • Intergenerational equity • Uses of GO bonds • Projects which benefit City as a whole and are consistent with voted authority • Not for operating or maintenance expense • Essential public purpose Debt Policy • Debt issuance targets • Designed to allow for manageable and affordable growth in the City’s debt burden • Designed with potential GO bond program in mind • Debt Service as a Percent of Revenues < 14.5% • Outstanding Debt as a Percent of Revenues < 125% • Outstanding Debt as a Percent of Full Value of Property < 4.5% Debt Policy Targets 20.00% Debt Service as a % of Governmental Activities Revenues 16.00% 12.00% 8.00% 4.00% 0.00% No New Debt Add: $76.425 million Appropriation and $800 million G.O. ($40 million Annually) Add: $76.425 million Appropriation and $800 million G.O. ($80 million Annually) Policy Goal - Under 14.50% Debt Policy Targets Debt as a % of Governmental Activities Revenues 200.00% 150.00% 100.00% 50.00% 0.00% No New Debt Add: $76.425 million Appropriation and $800 million G.O. ($40 million Annually) Add: $76.425 million Appropriation and $800 million G.O. ($80 million Annually) Policy Goal - Under 125% Moody's "Aa" Net Direct Debt per Operating Revenues - Low (33%) Moody's "Aa" Net Direct Debt per Operating Revenues - High (67%) Debt Policy Targets 6.00% Debt as a % of Full Value of Property 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% No New Debt Add: $76.425 million Appropriation and $800 million G.O. ($40 million Annually) Add: $76.425 million Appropriation and $800 million G.O. ($80 million Annually) Policy Goal - Under 4.50% Moody's "Aa" Net Direct Debt per Full Value - Low (0.75%) Moody's "Aa" Net Direct Debt per Full Value - High (1.75%) Debt Amortization $120,000,000 $100,000,000 $30,000,000 $00,000,000 $4 0,000,000 $20,000,000 50 Year 5- 32.11% Year 10- 152.10% 11311 q?i? 1019 $1.311.) 435311- 1531'; $1315 ul?ll? .1511 :2,ng $03? l??x nl?lyb 103$" .l?lgl? .1093" .3031 g??q I General Uh?galiun Taxpayer Impact - Estimated cumulative property tax increase: AVERAGE RESIDENTIAL YEAR 20 $100,000 $15,000 CAR $140,000 $15,000 CAR $200,000 $35,000 CAR CDMMERCIAL $1,000, 1GB, PROPERTY Taxpayer Impact Taxpayer Impact $140,000 Home; $15,000 Automobile Increase from FY 2017 $300 $250 $200 Accelerated Issuance $150 Issuance at $40 million per year $100 Issuance at $80 million per year $50 $FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 Streets (examples) Council District 3, 4, 5 Segment NE 96th Street to Anne Maplewoods Garney Park (for Parkway completion) Paseo and Independence Paseo Gateway Blvd Intersection KCATA MAX Bus service Prospect Avenue match 6 Red Bridge Road Wornall to Holmes Road $200,000 $2,000,000 $2,200,000 6 Holmes Road $650,000 $6,350,000 $7,000,000 2 Tiffany Springs Parkway $900,000 $9,040,000 $9,940,000 $400,000 $3,700,000 $4,100,000 $2,000,000 $22,000,000 $24,000,000 1, 2 3 3 2 Street Blue Ridge to 135th Platte Purchase Drive to Line Creek Parkway (west) 22nd/23rd Street Prospect to I-70 Line Creek Shoal Creek Pkwy to NW Parkway Stagecoach Road Design Construction Total Funded $7,000,000 $7,000,000 $300,000 $6,000,000 $6,300,000 $12,000,000 Streets (examples-2) Council District • • Street Segment 5 Blue River Rd Reconstruct due to landslide issues – 9800 Blk to Chestnut Dr. (closed section) 6 Wornall Road Reconstruct 63rd to 79th th 3 27 Street 1 N. Brighton Ave. Reconstruct Troost Ave to Prospect Ave 4 Pleasant Valley to 72nd St. Reconstruct NKC city N. Oak Trafficway limits to N. Indianola Dr. 6 135th Street Wornall to Hwy 150 Focused on existing arterial streets Includes evaluating for bike/ped facilities Design Construction Total $600,000 $5,900,000 $6,500,000 $1,100,000 $11,400,000 $12,500,000 $550,000 $5,250,000 $5,800,000 $1,300,000 $13,700,000 $15,000,000 $600,000 $5,900,000 $6,500,000 $400,000 $3,600,000 $4,000,000 Bridges (examples) Council District Bridge Segment Design Construction Total 3 Over Round Grove Creek (between Bryam’s Ford bridge Raytown Rd and 47th Ter) $150,000 $1,250,000 $1,400,000 5 Over the Big Blue River (between Gregory Blvd bridge Elmwood Ave and Oldham Rd) $500,000 $4,800,000 $5,300,000 3 Over Brush Creek (between Emanuel Benton Blvd. bridge Cleaver II Blvd and Blue Pkwy) $350,000 $3,350,000 $3,700,000 3 Over the Big Blue River (between Crystal E. 12 Street bridge and I-435 outer road) $500,000 $4,600,000 $5,100,000 th Sidewalks Council District Citywide Sidewalk Neighborhood Sidewalk repairs Segment Systematic repair without assessment to adjoining property owners Total $10,000,000 Per year Flood Control (examples) Council District Location 3, 4, 5 Enshriner’s Lake/Brush Creek Dredge, restore shoreline, raise trail for east end of Brush creek. Leveraged funding $3,100,000 $17,600,000 $20,700,000 Brookside Storm drainage Prevent frequent flooding $7,125,000 $40,375,000 $47,500,000 4, 6 5 Work Swope Park Industrial Area Leveraged funding Design Construction Total $2,100,000 $11,900,000 $14,000,000 4 Turkey Creek Hillside drainage – leveraged funding Westport/Mill Creek drainage Prevent frequent flooding $8,175,000 $46,325,000 $54,500,000 2 Line Creek Channel stabilization and modification along East Fork of Line Creek $2,400,000 $13,600,000 $16,000,000 6 Indian Creek State Line to Wornall Road $4,500,000 $25,500,000 $30,000,000 4 $1,425000 $8,075,000 $9,500,000 Parks (examples) Council District CW CW CW Park Feature or Item Location Description ADA improvements at 163 Park locations (not buildings) Park Facility ADA Improvements Various Park Locations Aquatics Demos, renovation, 6 Park Locations replacements Shelters Replace existing shelter 5 Park Locations with new Design Construction Total $2,445,000 $24,450,000 $26,895,000 $615,000 $6,150,000 $6,765,000 $59,000 $1,250,000 $1,309,000 Public Buildings (examples) Council District 5 5 Facility KC Animal Shelter Description Replace, enlarge, provide serviceable space 1, 2 Starlight Theater ADA Improvements 4900 Swope Complete renovation of all Parkway Office four floors to make building Building functional. Restoration of Corinthian KC Museum Hall North Park District Replacement Building 3, 4 Park Facility Maintenance Div. 3 3 2 Line Creek Replacement Building Line Creek Community Center Ice Arena Upgrade Design Construction Total $140,000 $13,860,000 $14,000,000 $655,000 $6,547,000 $7,202,000 $750,000 $6,750,000 $7,500,000 Funded $7,000,000 $7,000,000 $700,000 $7,000,000 $7,700,000 $500,000 $5,000,000 $5,500,000 $400,000 $4,000,000 $4,400,000 Public Buildings (examples-2) Council District CW 4 3 5 Facility Description Design Construction Total City Hall ADA upgrades & exterior work $2,000,000 $18,000,000 $20,000,000 Municipal Auditorium Music Hall & Little Theater Museums at 18th ADA upgrades and & Vine improvements Swope Park Pool ADA Swope Park Improvements $414,000 $3,726,000 $4,140,000 $200,000 $1,000,000 $1,200,000 $143,000 $1,421,000 $1,564,000 Proposed Capital Maintenance Sales Tax Renewal • Current one-cent sales tax for capital improvements set to expire in December, 2018 • Generates $70 million a year for capital improvements and capital maintenance • Propose to renew one-cent sales tax for neighborhood capital improvements (PIAC) and capital maintenance for 20 years • 35% for neighborhood capital improvements as recommended by PIAC (current allocation) • 65% for citywide capital maintenance needs (roads, buildings, parks) • Provides adequate maintenance of City’s existing capital assets • No change in current City sales tax rate • Simple majority required for approval Prioritizing Projects • Projects will be prioritized based on several factors: • • • • • • • Projects that are shovel-ready Projects that are in the current Five-Year Capital Improvements Plan Projects that remain incomplete Projects that leverage federal grants or other private resources Projects that promote new development or redevelopment Projects that address state or federal mandates Projects that improve public safety Summary • Comprehensive approach to build and maintain the City’s capital assets • $800 million general obligation bond authorization • Renew capital improvements one-cent sales tax • Delivers highest priority needs picked by residents in annual citizen satisfaction surveys • Small increase in annual property tax bills offset by eliminating sidewalk special assessments • City Council to review all options and consider placing before voters • January 19, 2017 – Final Council meeting before ballot deadline • April 4, 2017 – Election date