Wichita council approves $2.4 billion, 10-year major projects plan
08/23/2013 4:55 PM
08/05/2014 11:10 PM
A long-term capital improvements plan that will delay the new central library and a few other projects to help hold down rising debt won approval from the Wichita City Council on Tuesday.
The council voted 6-1, with council member Pete Meitzner opposed.
Individual projects in the 10-year plan still require council approval, and Mayor Carl Brewer asked staff Tuesday for quarterly financial updates.
High-profile projects include the $200 million airport terminal; the $13.7 million Heartland Preparedness Center at I-135 and K-96; the new $30 million central library; the $180 million east Kellogg extension that includes about $66 million in local sales tax funding; and the 13th Street flyover, a $50 million project funded by local sales taxes. Also included is funding to enhance the city’s street maintenance program – $8 million in 2012, $9 million in 2013 and at least $10 million in 2014.
At issue for council members was a piece of the $2.4 billion plan, about $304 million in general obligation bond financing to be repaid by tax money from the city’s debt service fund, which is currently an estimated $30 million annually, said City Manager Robert Layton.
The plan approved Tuesday includes an increase in general obligation debt from $81 million in 2011 to an estimated $145 million in 2017 before retreating to $91 million by 2020.
The city council has established a benchmark for its debt service fund: no more than 67 percent of it should go to debt payments so emergency “pay-as-you-go” projects can be tackled. That means the city should be obligated to pay no more than $20 million this year.
Even so, the payments will spike to 82 percent with the debt in 2017, to an estimated $29 million in debt service with about $36 million available in the debt service fund, Layton said.
Meitzner said the rising debt led him to vote no.
“I’m very hesitant to endorse a document that raises the debt limit,” Meitzner said. “As long as the rating companies and the bonding companies can look at our city as they have in the past, I’ll be good.”
Brewer said the plan balances the council’s commitment to specific projects with a strong commitment to hold down debt and maintain enough cash in case of a natural disaster.
“We know it’s up, but we need to get these things done,” the mayor said. “That’s why I want the quarterly updates available to us, and the public, too.”
Brewer said the city must retain enough money in the debt service fund for emergencies.
“We have to have more money in there,” he said. “Even if a tornado comes through and FEMA (Federal Emergency Management Agency) comes in, they only pay 75 percent.”
Council members recommended a series of changes to the plan in January in response to that mounting general obligation debt. Those changes will delay about $80 million in projects, including the new central library on the southwest corner of Second and McLean, which will be pushed back a year to 2014-15. The plan doesn’t decrease funding for the library.
Other projects facing delay are road work, relocation of two police substations and a maintenance facility project.
“What we heard clearly from the council is that you wanted to adhere to the benchmarks as closely as possible,” Layton said. “You’re not locking yourselves into those projects. You’re trying to be good stewards of the plan in a way that will manage our debt.”
The capital improvement plan approved Tuesday includes 336 individual projects totaling a little more than $2.4 billion, with $872 million in water utilities projects and $579 million for streets, including an additional $33 million over 10 years to enhance street rehabilitation efforts, city finance spokesman Mark Manning said. An additional $305 million is marked for airport projects, including the new terminal and garage project.
Other primary funding sources for the plan, Manning said, include $872 million in water utilities revenue and $237 million in local sales tax funds.