All:
FYI.
Attached is the most recent draft to the Flint Capital Improvements Plan.
It was recently submitted to the City Planning Commission for approval so note that some of the projects could change
prior to final approval.
Planned Water System improvements begins on Page 47 of the .pdf.
\ note that Lead Service Line Replacement is listed as an Urgent project but with a cost TBD. No other information is
provided.
| also note about $34M in other system projects that have been identified.
There is not a great amount of detail in the document but it provides a good overview of some of the areas that the City
sees as priority.
If there are any questions, let me know.
Eric Cline | Department Manager | State of Michigan
Michigan Department of Treasury | Local Government Financial Services Division | Fiscal Responsibility Section
430 W. Allegan Street, 2rd Floor | Lansing MI 48922
Lansing Office (517) 335-2078 | Cell Phone 617 Traverse City Office (231) 922-5228
E-mail cliner1 @muichigan gov
CONFIDENTIALITY NOTICE This e-mail, and any attachments, is for the sole use of the intended recipient(s) and may contain
information that 1s confidential and protected from disclosure under the law, Any unauthorized review. use, disclosure, or distribution
Js prohibited If you are not the intended iecipient, please contact the sender by reply e-mau, and delete/destroy all copies of the
original message and attachments Thank you
xxxEND_PAGE:treasury01_b40_7317_7621_219
The introduction to the
Capital Improvement Plan
(CIP) is divided into three
sections:
+ Whatisa
Capital
inupraverent
+ Why Prepare a CIP?
+ How Does the CIP
Relate to the
Master Plan?
City of Flint Capital Improvement Plan « Introduction & Overview DRAFT - 1.10.16
WHAT IS
A CAPITAL
IMPROVEMENT PLAN?
A Capital Improvement Plan
(CIP) is a multi-year
program for expenditures
by the City of Flint for
rehabilitation,
replacement, and
balancing of the City’s
municipal infrastructure
systems, Projects
considered through the CIP
process involve proposed
investments in the City’s
infrastructure and
facilities, such as police
and fire stations, parks and
recreation facilities,
community centers,
offices, roads and
sidewalks, and utilities.
City of Flint Capital improvement Plan DRAFT - 1.10.16
Definition of Capital
Improvements
Capital improvements are
permanent physical
improvements, generally
expected to have a normal
life of ten years or longer.
Equipment and objects
needed for day-to-day use
are generally not
considered capital
improvements. Smaller
projects and projects that
are intended to last for
fewer than ten years are
funded through the City’s
operating budget.
CIP and Budgeting
ACIP is typically
prepared and adopted
annually by the Planning
Commission and is
presented as a
recommendation to the
Mayor and the City
Council.
Each year, the plan
identifies the physical
needs of the City’s
departments, estimates the
costs of proposed projects,
and recommends
expenditures and sources
of funding for priority
capital improvements.
As such, the CIP plays an
integral role in the process
of formulating the City’s
annual capital budget.
xxxEND_PAGE:treasury01_b40_7317_7621_220
City of Flint Capital improvement Plan » Introduction & Overview DRAFT — 1.10.16
20 Year Horizon
The Flint CIP is a 6-20 year
plan of programmed
projects for the City’s
municipal infrastructure
systems. The first two
years of this plan should
form the basis for the City’s
two-year Capital
Approval of annual budgets
allocates funds to
undertake projects in this
period, thus beginning the
implementation of the CIP.
In addition, capital projects
that will need to be
implemented between
years 7 and 20 are also
included to provide a basis
for future updates to this
CIP.
Uncertainty about the
availability of budgets does
not allow for these
necessary improvements to
be planned in the 6-year
period and are considered
unfunded needs in this CIP.
a
7
BENEFITS OF THE CIP
* Assist in implementation of the Master Plan.
+ Identify both short- and long-term capital expenditures to allow budgeting.
* Determine regular maintenance needs for City facilities so they remain viable.
+ Provide for a more effective evaluation of alternatives and solutions than the crisis-
decision process.
+ Enhance opportunities for grants by allowing for long-term planning.
+ Provide the ability to stabilize debt and consolidate projects to reduce borrowing costs.
+ Serve as a public relations and economic development tool.
+ Allow for a focus on preserving infrastructure while ensuring efficient use of public funds.
+ Provide opportunities for cooperation between departments and other units of
government, such as Genesee County and Flint Community Schools, by pooling
resources to reduce costs in some instances.
City of Flint Capital improvement Plan DRAFT — 1.10.16
Rok igs
xxxEND_PAGE:treasury01_b40_7317_7621_221
CAPITAL IMPROVEMENT
PLANNING IN FLINT
The City of Flint has been
significantly impacted by
factory closures and
population loss, with an 18%
decline in population
between the 2000 and 2010
census. The loss of jobs and
population and decline in
local tax revenue and state-
shared revenues has had a
significant impact on the
City’s finances. The City
returned to state
receivership in December
2011, as a result of
consistent deficits in the
General Fund, a decline in
pooled cash, poor budgeting
practices, and unfunded
liabilities for retiree
benefits
Significant progress has
been made in addressing
the financial issues leading
to the assignment of an
emergency manager, as the
$19.1 million deficit at the
end of FY12 had been
eliminated by the end of
FY15, largely as the result of
a $7 million emergency loan.
On April 29", 2015 the
Emergency Manager notified
the Governor of Michigan
that the financial emergency
in Flint had been resolved.
At that time, the Governor
relieved the Emergency
Manager of his
responsibilities and a
Receivership Transition
Advisory Board was created
to oversee the transition of
city affairs, to its charter-
designated officials.
For the first time in nearly a
decade, the City began FY16
City of Flint Capital improvement Plan « introduction & Overview DRAFT - 1.10.16
with positive balances in all
of its funds. Cash position
had drastically improved,
and the FY16 and FY17
Budgets are realistically
balanced.
Looking forward to FY18
and beyond however, the
City will continue to face
significant challenges as
expenditures are projected
to outpace any increases in
revenues leading to
operating deficits in many
of the City funds. Water
rate increases and the
renewal of two City
millage’s (Public Safety and
Parks and Recreation), will
assist in ensuring ongoing
sources of funding exist for
much needed capital
improvements, but will limit
the amount of progress that
can be made without
additional sources of
revenue or other decrease
operational costs.
While the City continues to
await resolution of litigation
over retiree healthcare that
could devastate the City’s
financial position, a number
of issues emerging in Q1 of
FY16 have adversely
impacted the ability to
complete even planned
FY16 capital improvements.
On August 17, 2015 a
preliminary injunction order
was issued against the City
requiring that the City
immediately reduce its
water and sewer rates. In
addition, the order barred
the City in shutting off a
service for non-payment or
collecting delinquent
balances prior to August 17.
City of Flint Capital improvement Plan DRAFT -— 1.10.16
This led to a projected
increase of uncollectible
accounts of approximately
$11 million, a decrease in
monthly billed revenue and
a drop in the number of
payments being received.
In order to respond to the
loss in projected revenue, a
spending freeze across the
City was implemented. At
this time, the freeze
remains in effect. For water
and sewer funds, it was
necessary to identify
projects which could be
eliminated or postponed to
lessen the financial burden
of the order and maintain
ongoing daily operations. To
that end, many of the water
and sewer capital
improvements were
eliminated or postponed
with the exception of any
projects necessary to ready
the City for receipt of water