Capital Planning Process
Planning for Community Facilities & Infrastructure
The Capital Improvement Program (CIP) is long-range, dynamic program for capital facilities, infrastructure projects, land acquisition, major studies, and equipment purchases. The CIP identifies project financing capacity while connecting with the County’s Strategic Plan and Comprehensive Plan goals. The CIP is a constant work in progress that is reviewed annually and updated to reflect community priorities, financing options, and ensure the needs of the community are identified now and for the future.
- Outreach & Planning
Kick-starting the annual budget process, each year, the Board of Supervisors, the School Board, and staff work with the community to identify projects which will shape the five-year capital improvement program (CIP) for general government and schools.
- Project Review & Plan Development
The county evaluates various project criteria such as critical, time-sensitive, needs, strategic plan alignment, major maintenance issues, public facilities plan alignment, maximizing existing resources (through rebuilds or renovations), eliminating lease space, and community revitalization efforts. While the school division also assesses changes in expected enrollments, academic programs, and facility conditions. In coordination, the Board of Supervisors and the School Board work to determine priorities for new construction, renovations, and other capital facility projects. Projects are prioritized and a five-year plan, including recommended funding, is identified.
- Plan Approval, Ongoing Project Updates
Once the Board of Supervisors adopts the CIP, current year projects will receive funding to begin work. Throughout the year, for ongoing projects, including major maintenance, or work that began in a prior year, staff continually monitors and reports out on project updates.
CIP Program Overview
The County’s CIP is divided in three major categories:
- General Government
Taking Care of Our Existing Assets
Over the course of the last several CIPs, the county has made significant investment to fund preventative maintenance, repair of capital facilities and infrastructure, and condition assessments; collectively referred to as major maintenance. With strong financial policies to help protect our capital assets, the county is committed to a funding goal of 2.5% of replacement costs for major maintenance on an ongoing basis.
Commitment to Strong Financials
The Board of Supervisors’ established financial policies include the guidelines below which direct any financial decisions on debt issuance. Adherence to these guidelines allows the County to plan for the necessary financing of capital projects while maintaining creditworthiness. In addition, adherence to these policies has enhanced Chesterfield County’s financial position. For more than two decades, Chesterfield County has earned a triple-AAA bond rating, resulting from the robust and diverse economy and record of fiscal conservatism and strong financial management. The triple-AAA rating ensures Chesterfield County can borrow funds for the community’s capital and infrastructure needs at the lowest available interest rates.
June 20, 2019
|Planning Cap||Planning Ceiling|
|Debt as a Percentage of Assessed Value||1.15%||2.5%||3%|
|Debt as Personal Income||2.8%||5%||6%|
|Debt Service as Percentage of General Expenditures||6.47%||10%||11%|
|Unassigned General Fund Balance as Percentage of General Fund Expenditures||9.49%||8%||6% (floor)|
|10 Year Payout Ratio||74.9%||65%||60% (floor)|
Capital Project Financing
When it comes to developing a capital budget, there are multiple options to explore:
General Obligation (GO) Bonds
A certificate of debt issued by a government in which the payment of the original investment plus interest is guaranteed and secured by the full faith and credit of the government. Issuance of these bonds usually requires voter approval.
Virginia Public School Authority (VPSA) Bonds
Financing options for localities to fund capital projects for public schools.
Public Facility Revenue Bonds
A certificate of debt issued by a government in which the payment of the original investment plus interest is guaranteed by specific revenues generated by the project financed.
A certificate of debt issued by a government which is used to pay the principal and interest on existing debt. The new debt proceeds are placed in a trust with a fiscal agent and used specifically to satisfy the scheduled interest payments and maturity/call date of the refunded debt.
Pay-as-you-go Capital Funding (Pay-go)
Funding projects through cash on hand; not using borrowed money. Unused pay-go funds are reserved for future capital project needs
Reserve for CIP (RFCIP)
Monies set aside from prior years to fund capital projects. The Board of Supervisors’ established policy annually allocates an amount equal to five percent of general fund departmental expenditures (excluding transfers, grants, unassigned fund balance, debt service, and respective flow-through expenditures).
Remaining balances on completed projects are reallocated to fund other capital projects.
Funds approved at time of rezoning to help defray the capital costs associated with requested development. Effective September 2016, the Board of Supervisors amended the cash proffer policy, as necessitated by changes to the state code, to reflect a road only cash proffer.
Public Private Partnership (P3)
Collaborative financing partnership between a private-sector company and a local government.
Monies awarded, typically through an application process, to localities for specific uses.