About
The capital budget is a plan for the construction or acquisition of physical assets and covers many different projects, from construction of schools and libraries to renovations of recreation centers and bridges. The County funds its capital program based on the requirements of the General Plan and supporting master plans for recreation and parks, human services, schools, community college, water and sewer, solid waste, libraries, police and fire stations and public facilities. The County uses an annual debt affordability process to determine reasonable debt levels.
The capital budget for FY 2024 is $418.1 million.
How does the Capital Budget work?
CIP Revenues
General Obligation (GO) Bonds are the County's top funding source for capital projects.
County’s capacity to issue new GO bonds is limited, due to existing authorized debt, which utilizes not only current but also future revenues to make debt service payments, and a slowdown in total revenue growth in the operating budget in recent years. Authorized GO debt has averaged around $75 million per year between FY21 and FY24.
Incurring more than adequate level of debt would:
- Increase the County’s debt burden or long-term liabilities
- Risk the County’s AAA credit rating
- Result in less funding to be available for all other services in the operating budget if debt service payments as a share of annual operating budget keeps growing
CIP Expenditures
The County’s primary source to fund capital projects are General Obligation (GO) bonds, which are backed by the full faith and credit of the County. Education spending accounts for over 34% of all GO bonds in FY24, with about 44% of this total going to the public schools. In addition, infrastructure projects of education entities receive significant other county funding (transfer tax, school surcharge and PAYGO) as well as State aid.
CIP Long-Term Outlook
General Obligation (GO) bonds infrastructure funding requests by all entities in FY24 continued to exceed affordable levels, as noted in the FY 2024 Spending Affordability Advisory Committee (SAAC) report.
With limited capacity to fund capital projects, the County has to balance the needs for maintaining, renovating and repairing existing infrastructure with those for new capital projects.
