TO: Mayor and Members of City Council
THRU: Douglas J. Hewett, ICMA-CM, City Manager
FROM: Jeffrey Yates, ICMA-CM, Assistant City Manager
Michelle Brooks, Interim Budget Director
DATE: April 8, 2026
RE:Title
Presentation of the Recommended FY2027-32 Capital Improvement Program
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COUNCIL DISTRICT(S):
Council District(s)
All
b
Relationship To Strategic Plan:
Goal 5: Financially Sound City Providing Exemplary City Services
Objective 5.1: To ensure strong financial management with fiduciary accountability and plan for the future resource sustainability by aligning resources with City priorities.
Executive Summary:
The Capital Improvement Program (CIP) serves as the City’s long-term planning and financial strategy for delivering major infrastructure and capital investments that support community growth and sustainability. While the annual operating budget focuses on day-to-day service delivery and immediate needs, the CIP provides a multi-year roadmap for significant projects such as infrastructure improvements, facility construction, vehicle replacement, and technology enhancements over the FY 2026-27 through FY 2031-32 period. The recommended CIP aligns with City Council’s strategic priorities and balances current obligations with future investment needs. The proposed adjustment to the General Capital Projects dedicated tax rate will support existing debt service commitments, expand capacity for new priority projects, and maintain flexibility for Pay-As-You-Go (PayGo) funding. This approach ensures the City can continue to invest in critical infrastructure while maintaining financial sustainability and positioning the community for long-term success.
Background:
The Capital Improvement Program (CIP) serves as the City’s long-term planning and financial framework for investing in infrastructure and major assets that support community growth, service delivery, and overall quality of life. Unlike the annual operating budget, which focuses on short-term, day-to-day expenditures, the CIP provides a multi-year roadmap for significant investments over the FY 2026-27 through FY 2031-32 period, including facilities, transportation systems, public safety infrastructure, technology, and other critical capital needs.
The CIP is intentionally structured to align with the City Council’s recently adopted Strategic Priorities and serves as a primary tool for implementing those priorities over time. Each project included in the program is evaluated based on its ability to advance key outcomes such as enhancing community safety, supporting revitalization and housing initiatives, expanding parks and recreation opportunities for youth engagement, promoting economic growth, and improving transportation and connectivity. This alignment ensures that capital investments are not made in isolation, but instead directly contribute to achieving measurable community goals and long-term policy objectives.
In addition to strategic alignment, the CIP is informed by ongoing community engagement efforts. Input gathered through public meetings, advisory boards, stakeholder discussions, and other outreach activities plays a critical role in identifying needs, shaping project priorities, and validating investment decisions. This engagement helps ensure that the CIP reflects the values and expectations of residents, improves transparency in the decision-making process, and strengthens public trust in how capital resources are allocated.
The program is guided by several core principles to ensure effective and responsible implementation. Priority is given to completing existing projects before initiating new ones, recognizing the importance of delivering on prior commitments and maximizing previous investments. The CIP also emphasizes aligning projects with the City’s organizational capacity to ensure they can be delivered efficiently and effectively. In addition, the plan prioritizes the maintenance and replacement of existing infrastructure as assets age and service demands increase. Finally, the CIP is designed to support long-term financial sustainability, incorporating a balanced and flexible funding strategy that enables the City to adapt to changing economic conditions while continuing to invest in critical infrastructure.
Issues/Analysis:
The City’s Capital Improvement Program (CIP) is structured to be financially sustainable, organizationally feasible, and responsive to evolving market conditions, ensuring that planned investments can be successfully delivered and maintained over time. Financial capacity focuses on affordability and long-term sustainability, utilizing a balanced mix of funding sources including General Obligation Bonds, annual appropriation debt, revenue bonds, and pay-as-you-go (PayGo) funding supported by current revenues, taxes, and fees. The CIP also leverages state and federal funding, intergovernmental partnerships, fund balance transfers, and the reallocation of resources from closed projects. Importantly, the program considers not only the initial cost of construction, but also the City’s ability to operate, maintain, and ultimately replace assets throughout their lifecycle.
Organizational capacity reflects the City’s ability to effectively plan, manage, and deliver capital projects. This includes both direct functions such as project management, engineering, and construction oversight, as well as indirect support functions like procurement, contracting, and financial administration. With significant investments underway-including $47.7 million in Parks and Recreation bond projects and $97 million in Public Safety, Housing, and Infrastructure bonds-the City continues to strengthen its project delivery practices, improve coordination across departments, and enhance accountability to ensure projects are completed on time and within budget.
Market capacity represents the ability of contractors, vendors, and service providers to meet the City’s project demands. In recent years, this capacity has been increasingly constrained due to limited contractor availability, rising construction costs, and ongoing global supply chain disruptions. Additionally, statutory procurement requirements add complexity to project delivery. In response, the City maintains flexibility within the CIP to adjust project timing, scope, or prioritization as needed to align with market conditions and available resources.
The City’s capital program is further supported by a combination of dedicated and supplemental funding sources. Dedicated property tax rates for Parks and Recreation, Public Safety and Housing, and General Capital Projects provide a stable funding base for debt service and capital investments. Supplemental funding sources-including motor vehicle license fees, Powell Bill funding for street maintenance, fund balance appropriations, project savings from completed projects, and sales tax reimbursements-enhance the City’s ability to fund priority projects while minimizing reliance on any single revenue source.
Community engagement is an important component of the CIP development process and helps inform funding priorities and project selection. Input gathered through public outreach, advisory boards, and stakeholder engagement ensures that capital investments reflect community needs, address service gaps, and support equitable outcomes across the City. This engagement strengthens transparency and reinforces alignment between funding decisions, strategic priorities, and community expectations.
For FY 2026-27, the recommended CIP includes approximately $108 million in new funding, contributing to a total six-year program of $694.6 million. Fund-level summaries provide detailed information on planned investments across key service areas, including parks and recreation, general government, public safety, transportation, stormwater, transit, and airport improvements. Each fund identifies new appropriations, reallocated savings from closed projects, and unfunded project needs, ensuring transparency and demonstrating how available resources are aligned with strategic priorities, organizational capacity, and community input.
Budget Impact:
The General Government Capital Project Fund totals $88.4 million, including $8.8 million in new FY2027 funding, and has reallocated $144,885 from two completed projects to support ongoing priorities. Despite this investment, the fund continues to face unfunded needs, including major system upgrades such as the Host of Universal Business System Phase III and facility maintenance improvements, reflecting ongoing pressure to modernize core operations and infrastructure.
The Environmental Protection Capital Fund totals $39 million, with $9.1 million in new funding dedicated to stormwater and environmental initiatives. The Public Safety Capital Project Fund totals $113.6 million, including $51.3 million in general obligation bonds, and has reallocated $118,200 from seven completed projects. However, significant unfunded needs remain, including $26.85 million for fire station renovations and $12 million for the construction of Fire Station #18, underscoring continued demand for public safety infrastructure.
The Parks and Recreation Capital Project Fund totals $40 million, with $1.7 million in new funding and $885,000 reallocated from three completed projects. While this fund supports ongoing improvements to parks and facilities, unfunded needs remain, including $1.4 million for tennis court resurfacing and $700,000 for renovations at North Carolina Veterans Park, reflecting the need to maintain and enhance community amenities.
The Transportation Capital Project Fund totals $121 million, with $7.8 million in new funding to support mobility and infrastructure improvements. Key unfunded priorities include $7.4 million for the Village Drive Complete Street project and $4.6 million for Blanton Road construction, both of which are important for improving connectivity and supporting growth.
The Stormwater Capital Project Fund represents the City’s largest capital investment area at $155 million, including $40 million in new funding and $178,463 reallocated from three completed projects. While significant progress is being made in addressing drainage and flood mitigation, additional needs remain, including $95,000 for stormwater office capacity optimization.
The Transit Capital Project Fund totals $20.4 million, with $5.8 million in new funding to support transit operations and infrastructure. Unfunded priorities include $450,000 for LTV replacements and $500,000 for a vehicle wash facility, both of which are important for maintaining service reliability and operational efficiency. The Transit Special Revenue Fund totals $2.3 million, including $100,000 in new funding, primarily supporting employee education and training initiatives.
The Airport Capital Project Fund totals $46.1 million, with $13.2 million in new funding primarily supported through state and federal grants and user fees, minimizing local financial impact. The Solid Waste Capital Project Fund includes $378,828 in FY2027 funding, supporting implementation of a new onboarding system funded through the Solid Waste Enterprise Fund.
Options:
Receive the Recommended FY2027-FY2032 Capital Improvement Plan as presented.
Recommended Action::Recommended Action
Staff recommends Council move to receive the Recommended FY2027-32 Capital Improvement Plan as presented.
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Attachments:
Recommended FY2027-32 Capital Improvement Plan document