It’s budget season, and the meetings are coming hot and heavy. The Finance and Pension Advisory Committee (FiPAC) as well as the Parks and Community Services PACS) Commission got its first peeks at the capital improvement schedule for next year in the past two weeks. Now, it is the City Council’s turn to take a look tonight.

How’s it looking? Well, it’s not great. It’s pretty bad actually. Last year, the city anticipated spending $47.9 million on capital improvement projects. But, as I noted when that budget was released, that big number was misleading; it included $20 million of anticipated bond financing for two large capital projects, which ultimately didn’t end up being funded. So the “real” number for FY 2024-2025 spent on capital projects was closer to $27.9 million.

This year, the city is proposing $28.7 million in total capital improvement pending, which at first seems slightly better than last year’s. But, once again, appearances are deceiving. That $20 million bond that didn’t happen last year? Well, it’s transformed into a more modest $12 million proposed bond issuance this year. So, backing this new bond issuance out, we’re left with a very paltry $16.7 million in “real” capital improvement spend. That’s the smallest budget since COVID.

Actually, it’s a lot smaller than even COVID. The 2020-2021 capital improvement budget, which also featured a full waiver of the CAN ordinance, was approximately $13.9 million. Adjusted for inflation since June 2020 when it was adopted, that budget would have the buying power of approximately $25.7 million in today’s dollars. So in real terms, capital improvement spending is down in a big way.

So now what?

First, as I thought they might earlier in the year, Staff will in fact be asking the City Council to waive the so-called “CAN”, or capital asset needs, ordinance, which requires the city to spend at least 5% of its anticipated general fund revenues on capital improvements. But what I didn’t expect is for the Staff to also tease asking for a preemptive waiver of the CAN ordinance for next year as well. That might suggest that the Staff is seeing some really ugly numbers, either with respect to our sales tax receipts or in the macroeconomy more generally. Or maybe it is just being cautious.

I think this meeting is going to be worth your time. You can attend in person at City Hall at 5:00pm (rather than the usual 6:00pm start time) and follow along on YouTube or on Zoom. More details can be found in the agenda for tonight’s meeting.